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Newmont (NEM) to Report Q2 Earnings: What's in the Cards?
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Newmont Mining Corporation (NEM - Free Report) is scheduled to report second-quarter 2018 results before the opening bell on Jul 26.
In the last reported quarter, the gold miner delivered a positive earnings surprise of 6.1% by posting an adjusted earnings of 35 cents per share that beat the Zacks Consensus Estimate of 33 cents. The bottom line was driven by higher realized gold prices.
Revenues rose around 7.5% year over year to $1,817 million. However, the figure missed the Zacks Consensus Estimate of $1,847.2 million.
Notably, Newmont surpassed expectations in three of the trailing four quarters with an average positive surprise of 20.8%.
Will the company surprise investors this quarter or is it heading for a possible pullback? Let’s see how things are shaping up for this announcement.
Newmont, during first-quarter earnings call, stated that it expects attributable gold production in the range of 4.9-5.4 million ounces for 2018 and 2019. The company also kept all-in sustaining costs (AISC) unchanged for 2018 in the range of $965-$1,025 per ounce. Costs applicable to sales outlook for gold remain unchanged in the range of $700-$750 per ounce.
Total revenues for the second quarter are projected to decrease roughly 3.4% sequentially, as the Zacks Consensus Estimate for the quarter is currently pegged at $1,755 million. Notably, the projected figure marks a 6.4% year-over-year decrease from $1,875 million.
The North American portfolio delivered an impressive performance in the first quarter and is expected to produce 2-2.2 million ounces of gold in 2018. At Carlin, initiatives to boost ground control and stope design enabled the company to accelerate production with better development rates and higher grades in mines.
Moreover, the company processed the first shipments of concentrates from Cripple Creek & Victor (CC&V) and projects higher-than-expected recoveries. However, production at CC&V is likely to be affected in the second quarter due to planned maintenance shutdown at Mill 6. Notably, CC&V's production was negatively impacted in the first quarter due to the stockpiling of concentrates and the timing of leach recoveries.
The company revised guidance for the Twin Creeks, which reflects higher costs and slightly lower production for 2018 as a result of shifting focus to the next stripping campaign at the Mega pit and managing geotechnical issues. The company expects gold production from Twin Creeks between 315,000 and 345,000 ounces in 2018, at AISC in the range of $875-$925 per ounces.
Earlier this month, Newmont announced that it has achieved commercial production at its Twin Creeks Underground expansion project. The project was completed on schedule for $42 million and enables it to add higher-grade, lower-cost gold production at its Twin Creeks operation in Nevada. The mine will add 30,000-40,000 ounces of gold per annum at all-in sustaining costs of $650-$750 per ounce for the initial five years of production.
Regarding the Australian operations, Newmont optimized its mill maintenance strategy at Boddington to reduce the total number of plant shutdowns per year to three from four. The change delayed production in the first quarter. However, it expects to reach high gold grades during the second quarter and remains on track to accomplish full-year targets.
However, Newmont faces headwinds from high production costs in 2018. The company’s projected AISC for 2018 is higher than $924 recorded for full-year 2017. Newmont’s AISC rose 8% year over year to $973 in the first quarter, mainly due to higher per unit CAS, higher exploration costs and increased spending on advanced projects. Increased project spending is expected to keep AISC at elevated levels.
Shares of Newmont have lost 9.8% in the past three months compared with the industry’s decline of 2.4%.
Earnings Whispers
Our proven model does not conclusively show that Newmont is likely to beat estimates this quarter. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below:
Earnings ESP: Earnings ESP for Newmont for the second quarter is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at 24 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Newmont currently carries a Zacks Rank #3, which when combined with a 0.00% ESP, makes surprise prediction difficult.
Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks Poised to Beat Estimates
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Eastman Chemical Company (EMN - Free Report) has an Earnings ESP of +1.25% and holds a Zacks Rank #2.
Ingevity Corporation (NGVT - Free Report) has an Earnings ESP of +1.52% and carries a Zacks Rank #3.
Allegheny Technologies Incorporated (ATI - Free Report) has an Earnings ESP of +2.34% and carries a Zacks Rank #3.
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Newmont (NEM) to Report Q2 Earnings: What's in the Cards?
Newmont Mining Corporation (NEM - Free Report) is scheduled to report second-quarter 2018 results before the opening bell on Jul 26.
In the last reported quarter, the gold miner delivered a positive earnings surprise of 6.1% by posting an adjusted earnings of 35 cents per share that beat the Zacks Consensus Estimate of 33 cents. The bottom line was driven by higher realized gold prices.
Revenues rose around 7.5% year over year to $1,817 million. However, the figure missed the Zacks Consensus Estimate of $1,847.2 million.
Notably, Newmont surpassed expectations in three of the trailing four quarters with an average positive surprise of 20.8%.
Will the company surprise investors this quarter or is it heading for a possible pullback? Let’s see how things are shaping up for this announcement.
Newmont Mining Corporation Price and EPS Surprise
Newmont Mining Corporation Price and EPS Surprise | Newmont Mining Corporation Quote
Factors at Play
Newmont, during first-quarter earnings call, stated that it expects attributable gold production in the range of 4.9-5.4 million ounces for 2018 and 2019. The company also kept all-in sustaining costs (AISC) unchanged for 2018 in the range of $965-$1,025 per ounce. Costs applicable to sales outlook for gold remain unchanged in the range of $700-$750 per ounce.
Total revenues for the second quarter are projected to decrease roughly 3.4% sequentially, as the Zacks Consensus Estimate for the quarter is currently pegged at $1,755 million. Notably, the projected figure marks a 6.4% year-over-year decrease from $1,875 million.
The North American portfolio delivered an impressive performance in the first quarter and is expected to produce 2-2.2 million ounces of gold in 2018. At Carlin, initiatives to boost ground control and stope design enabled the company to accelerate production with better development rates and higher grades in mines.
Moreover, the company processed the first shipments of concentrates from Cripple Creek & Victor (CC&V) and projects higher-than-expected recoveries. However, production at CC&V is likely to be affected in the second quarter due to planned maintenance shutdown at Mill 6. Notably, CC&V's production was negatively impacted in the first quarter due to the stockpiling of concentrates and the timing of leach recoveries.
The company revised guidance for the Twin Creeks, which reflects higher costs and slightly lower production for 2018 as a result of shifting focus to the next stripping campaign at the Mega pit and managing geotechnical issues. The company expects gold production from Twin Creeks between 315,000 and 345,000 ounces in 2018, at AISC in the range of $875-$925 per ounces.
Earlier this month, Newmont announced that it has achieved commercial production at its Twin Creeks Underground expansion project. The project was completed on schedule for $42 million and enables it to add higher-grade, lower-cost gold production at its Twin Creeks operation in Nevada. The mine will add 30,000-40,000 ounces of gold per annum at all-in sustaining costs of $650-$750 per ounce for the initial five years of production.
Regarding the Australian operations, Newmont optimized its mill maintenance strategy at Boddington to reduce the total number of plant shutdowns per year to three from four. The change delayed production in the first quarter. However, it expects to reach high gold grades during the second quarter and remains on track to accomplish full-year targets.
However, Newmont faces headwinds from high production costs in 2018. The company’s projected AISC for 2018 is higher than $924 recorded for full-year 2017. Newmont’s AISC rose 8% year over year to $973 in the first quarter, mainly due to higher per unit CAS, higher exploration costs and increased spending on advanced projects. Increased project spending is expected to keep AISC at elevated levels.
Shares of Newmont have lost 9.8% in the past three months compared with the industry’s decline of 2.4%.
Earnings Whispers
Our proven model does not conclusively show that Newmont is likely to beat estimates this quarter. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below:
Earnings ESP: Earnings ESP for Newmont for the second quarter is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at 24 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Newmont currently carries a Zacks Rank #3, which when combined with a 0.00% ESP, makes surprise prediction difficult.
Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks Poised to Beat Estimates
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Eastman Chemical Company (EMN - Free Report) has an Earnings ESP of +1.25% and holds a Zacks Rank #2.
Ingevity Corporation (NGVT - Free Report) has an Earnings ESP of +1.52% and carries a Zacks Rank #3.
Allegheny Technologies Incorporated (ATI - Free Report) has an Earnings ESP of +2.34% and carries a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>