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Newmont Mining Corporation (NEM - Free Report) delivered net income from continuing operations of $274 million or 51 cents per share in second-quarter 2018, up from net income of $190 million or 36 cents in the year-ago quarter. The bottom line was driven by higher realized gold prices, lower income taxes and gain realized from sales royalty portfolio, partly offset by lower production at Boddington, CC&V, Akyem and Twin Creeks.
Barring one-time items, adjusted earnings were 26 cents per share, which beat the Zacks Consensus Estimate of 24 cents.
Newmont reported revenues of $1,662 million, down around 11.4% year over year. The figure missed the Zacks Consensus Estimate of $1754.7 million.
Newmont Mining Corporation Price, Consensus and EPS Surprise
Newmont's attributable gold production fell 14% year over year to 1.16 million ounces in the second quarter.
Average net realized gold price increased 3.4% to $1,292 per ounce from $1,250 an ounce a year ago. Average net realized copper price rose roughly 22% to $2.99 per pound from $2.46 per pound.
Newmont’s costs applicable to sales (CAS) for gold was $751 per ounce in the quarter, up 13% due to higher stockpile and leach pad inventory adjustments, lower production, higher oil prices and impact of KCGM rock falls. Copper CAS was $1.70 per pound, up roughly 23% year over year.
All-in sustaining costs (AISC) for gold rose 16% year over year to $1,024 per ounce.
Regional Performance
North America
Attributable gold production in North America was 430,000 ounces, down 26% year over year. Consolidated copper production was at 4,000 tons, down 20% from 5,000 tons recorded in the year-ago quarter.
Gold CAS for the region was $802 per ounce compared with $628 in the year-ago quarter. Copper CAS was $2 per pound, rising 25% year over year.
South America
Attributable gold production in South America was 141,000 ounces, down 8% year over year. Gold CAS for the region fell 14% to $711 per ounce.
Australia
Attributable gold and copper production in the region was 391,000 ounces, down 2% year over year. Gold CAS and copper CAS in this region was $710 per ounce, up 9%, and $1.59 per pound, up 25%, respectively.
Africa
The region produced 200,000 ounces of gold in the reported quarter, down 9% year over year. Gold CAS was $762 per ounce, up 26%.
Financial Position
Net cash provided by continuing operating activities fell 23.6% year over year to $399 million in second-quarter 2018. The company ended the second quarter with roughly $3.1 billion of cash in hand and total debt of $4,042 million, down from $4,046 million a year ago.
Outlook
Newmont continues to expect attributable gold production in the range of 4.9–5.4 million ounces for 2018 and 2019.
The company kept its AISC unchanged for 2018 in the range of $965-$1,025 per ounce. CAS outlook for gold is also unchanged in the range of $700-$750 per ounce.
The company’s attributable copper production forecast for 2018 remains unchanged in the range of 40,000-60,000 tons.
Price Performance
Newmont’s shares have lost 7.8% in the past three months compared with the 4.4% decline recorded by its industry.
KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have returned 42% in a year.
Methanex has an expected long-term earnings growth rate of 15%. Its shares have rallied 51.8% in a year.
BHP Billiton has an expected long-term earnings growth rate of 5.3%. Its shares have gained 23% in a year.
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Newmont (NEM) Q2 Earnings Beat, Revenues Trail Estimates
Newmont Mining Corporation (NEM - Free Report) delivered net income from continuing operations of $274 million or 51 cents per share in second-quarter 2018, up from net income of $190 million or 36 cents in the year-ago quarter. The bottom line was driven by higher realized gold prices, lower income taxes and gain realized from sales royalty portfolio, partly offset by lower production at Boddington, CC&V, Akyem and Twin Creeks.
Barring one-time items, adjusted earnings were 26 cents per share, which beat the Zacks Consensus Estimate of 24 cents.
Newmont reported revenues of $1,662 million, down around 11.4% year over year. The figure missed the Zacks Consensus Estimate of $1754.7 million.
Newmont Mining Corporation Price, Consensus and EPS Surprise
Newmont Mining Corporation Price, Consensus and EPS Surprise | Newmont Mining Corporation Quote
Operational Highlights
Newmont's attributable gold production fell 14% year over year to 1.16 million ounces in the second quarter.
Average net realized gold price increased 3.4% to $1,292 per ounce from $1,250 an ounce a year ago. Average net realized copper price rose roughly 22% to $2.99 per pound from $2.46 per pound.
Newmont’s costs applicable to sales (CAS) for gold was $751 per ounce in the quarter, up 13% due to higher stockpile and leach pad inventory adjustments, lower production, higher oil prices and impact of KCGM rock falls. Copper CAS was $1.70 per pound, up roughly 23% year over year.
All-in sustaining costs (AISC) for gold rose 16% year over year to $1,024 per ounce.
Regional Performance
North America
Attributable gold production in North America was 430,000 ounces, down 26% year over year. Consolidated copper production was at 4,000 tons, down 20% from 5,000 tons recorded in the year-ago quarter.
Gold CAS for the region was $802 per ounce compared with $628 in the year-ago quarter. Copper CAS was $2 per pound, rising 25% year over year.
South America
Attributable gold production in South America was 141,000 ounces, down 8% year over year. Gold CAS for the region fell 14% to $711 per ounce.
Australia
Attributable gold and copper production in the region was 391,000 ounces, down 2% year over year. Gold CAS and copper CAS in this region was $710 per ounce, up 9%, and $1.59 per pound, up 25%, respectively.
Africa
The region produced 200,000 ounces of gold in the reported quarter, down 9% year over year. Gold CAS was $762 per ounce, up 26%.
Financial Position
Net cash provided by continuing operating activities fell 23.6% year over year to $399 million in second-quarter 2018. The company ended the second quarter with roughly $3.1 billion of cash in hand and total debt of $4,042 million, down from $4,046 million a year ago.
Outlook
Newmont continues to expect attributable gold production in the range of 4.9–5.4 million ounces for 2018 and 2019.
The company kept its AISC unchanged for 2018 in the range of $965-$1,025 per ounce. CAS outlook for gold is also unchanged in the range of $700-$750 per ounce.
The company’s attributable copper production forecast for 2018 remains unchanged in the range of 40,000-60,000 tons.
Price Performance
Newmont’s shares have lost 7.8% in the past three months compared with the 4.4% decline recorded by its industry.
Zacks Rank & Stocks to Consider
Newmont currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the basic materials space are KMG Chemicals, Inc. , Methanex Corp. (MEOH - Free Report) and BHP Billiton Ltd. (BHP - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have returned 42% in a year.
Methanex has an expected long-term earnings growth rate of 15%. Its shares have rallied 51.8% in a year.
BHP Billiton has an expected long-term earnings growth rate of 5.3%. Its shares have gained 23% in a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>