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Newmont's (NEM) Q1 Earnings Top, Revenues Lag Estimates

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Newmont Corporation (NEM - Free Report) reported earnings from continuing operations of 42 cents per share in first-quarter 2023 compared with earnings of 54 cents reported in the year-ago quarter.

Barring one-time items, adjusted earnings were 40 cents per share, down from 69 cents reported in the prior-year quarter but ahead of the Zacks Consensus Estimate of 33 cents.

The company’s revenues for the first quarter were $2,679 million, down around 11% year over year. The figure missed the Zacks Consensus Estimate of $2,861.3 million.

Higher costs and lower production weighed on the company’s first-quarter performance. Costs were higher due to reduced production volumes and global cost pressures.

 

Newmont Corporation Price, Consensus and EPS Surprise

 

Newmont Corporation Price, Consensus and EPS Surprise

Newmont Corporation price-consensus-eps-surprise-chart | Newmont Corporation Quote

 

Operational Highlights

Newmont's attributable gold production in the first quarter was 1.27 million ounces, down 5% from 1.34 million ounces a year ago. Production was hurt by lower mill recovery and ore grade milled at Penasquito due to mine sequencing, mill shutdown at Tanami due to rainfall and lower production at Nevada Gold Mines.

Average realized prices of gold rose around 0.7% year over year to $1,906 per ounce.

The company’s costs applicable to sales (CAS) for gold were $1,025 per ounce, up 15% year over year.

All-in-sustaining costs (AISC) for gold were up around 19% year over year to $1,376 per ounce.

Financials

The company ended the quarter with cash and cash equivalents of $2,657 million, down around 38% year over year. At the end of the quarter, the company had long-term debt of $5,572 million, flat year over year.

Net cash from continuing operations amounted to $481 million for the reported quarter.

Outlook

Newmont said that it is on track to achieve attributable gold production guidance of 5.7-6.3 million ounces. The company also expects gold CAS between $870 and $970 per ounce, and AISC within $1,150-$1,250 per ounce.

The company expects to produce roughly 24% of its full-year gold guidance in the second quarter of 2023. Roughly 55% of its full-year gold production guidance is projected to be delivered in the second half of the year.

Price Performance

Newmont’s shares have lost 35.6% in the past year compared with a 21% decline of the industry.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Zacks Rank & Other Key Picks

Newmont currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , PPG Industries, Inc. (PPG - Free Report) and Linde plc (LIN - Free Report) .

Steel Dynamics currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for STLD's current-year earnings has been revised 36.5% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 10.7%, on average. STLD has gained around 14% in a year.

PPG Industries currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for PPG's current-year earnings has been revised 9.5% upward in the past 60 days.

PPG Industries’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 6.8%, on average. PPG has gained around 5% in a year.

Linde currently carries a Zacks Rank #2. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 0.9% upward in the past 60 days.

Linde beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 5.9% on average. LIN’s shares have gained roughly 16% in the past year.

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