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Newmont's (NEM) Earnings & Revenues Miss Estimates in Q4
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Gold mining giant Newmont Mining Corporation (NEM - Free Report) posted net loss from continuing operations (as reported) of $391 million or 73 cents per share in fourth-quarter 2016. Losses widened 41.7% from $276 million or 54 cents per share recorded a year ago. The company recorded a non-cash impairment charge of $970 million in the quarter associated with the closure of its Yanacocha gold mine in Peru.
Baring one-time items, adjusted earnings were 33 cents per share for the quarter, missing the Zacks Consensus Estimate of 39 cents.
Newmont's revenues of $1,789 million for the quarter jumped 23.2% from $1,452 million in the year-ago quarter owing to higher gold sales and improved pricing. However, revenues missed the Zacks Consensus Estimate of $1,807 million.
In fourth-quarter 2016, average net realized gold price was $1,193 per ounce, reflecting a year-over-year increase of 9.1%. The average net realized copper price was $2.49 per pound, representing a year-over-year increase of 29%.
Newmont's attributable gold production increased 17.2% year over year to 1.32 million ounces in the quarter. The increase can be attributed to production at Merian, Long Canyon and Cripple Creek & Victor offsetting grade reduction at Yanacocha. Attributable copper production of 13,000 tons in the quarter remained mostly unchanged year over year.
Costs applicable to sales (CAS) were $681 per ounce for gold in the quarter, declining 5.4% year over year. Copper CAS in the reported quarter was $1.88 per pound, an increase of 11.2% year over year. Lower-cost ounces from Long Canyon, Merian and Cripple Creek & Victor coupled with favorable oil prices and exchange rates offset reduced grades and higher non-cash inventory costs at Yanacocha and Ahafo.
All-in sustaining costs (AISC) of $918 per ounce for gold fell roughly 11.4% year over year while $2.31 per pound for copper was up almost 11% year over year. Gold AISC improved over the prior-year period due to lower sustaining capital and advanced projects spend.
Newmont Mining Corporation Price, Consensus and EPS Surprise
Attributable gold production in North America in the fourth quarter was 551,000 ounces, rising 29% year over year. Consolidated copper production was at 4,000 tons, down from the 5,000 tons figure recorded in the year-ago quarter.
Gold CAS for the region was $721 per ounce, down 12.4%, and copper CAS was $2.44 per pound, increasing 14%.
South America
Attributable gold production in South America was 166,000 ounces, climbing 53.7% year over year. Gold CAS for this region declined 12% year over year to $631 per ounce.
Asia Pacific
Attributable gold and copper production in the Asia Pacific region was 396,000 ounces, inching up 0.7% year over year, and 9,000 tons, on par with the year-ago quarter, respectively. Gold and copper CAS for this region was $642 per ounce, down 4.6%, and $1.68 per pound, up 6.3%, respectively.
Africa
The region produced 210,000 ounces of gold in the reported quarter, up 4.5% year over year. Gold CAS was $768 per ounce increasing 32.6% year over year.
Financial Position
Net cash provided by continuing operating activities was $590 million in the fourth quarter, compared with $284 million in the prior-year quarter mainly due to increased sales and improved gold pricing.
In 2016, Newmont repaid debt worth $1.3 billion. Long-term debt reduced to $4,049 million, down 30.8% from $5,854 million a year ago.
Outlook
Newmont anticipates attributable gold production to be in the range of 4.9–5.4 million ounces in 2017. Production at Merian and Long Canyon is anticipated to compensate the impact of declines at Twin Creeks and Yanacocha.
Attributable copper production is forecast between 40,000–60,000 tons in 2017.
Gold CAS is expected to be between $700 and $750 per ounce in 2017. The company expects CAS to improve to $650 and $750 per ounce over the longer term. AISC is forecast to be between $940 and $1,000 per ounce in 2017.
Copper CAS is estimated in the range of $1.45–$1.65 per pound in 2017. AISC is expected to be between $1.85 and $2.05 per pound in 2017.
Over the longer term, Copper CAS is expected to be between $1.5 and $1.9 per pound, and copper AISC is expected to be between $1.85 and $2.25 per pound, below the previous guidance due to a shift in allocation of costs between copper and gold.
Capital spending for 2017 is expected in the range of $800–$900 million. This includes sustaining capital expenditure of between $600 million and $700 million, represents a 24% reduction from previous guidance due to cost savings and deferrals.
Price Performance
Newmont’s shares have underperformed the Zacks categorized Mining-Gold industry in the past three months. The company’s shares have gained 18.8% over this period compared with the industry’s gain of 23.6%.
Zacks Rank & Key Picks
Newmont currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies in the basic materials space include Hudbay Minerals Inc. (HBM - Free Report) , Albermale Corporation (ALB - Free Report) and BASF SA (BASFY - Free Report) .
Albermale has an expected long-term growth of 10% and carries a Zacks Rank #2 (Buy).
BASF has an expected long-term growth of 7.7% and carries a Zacks Rank #2.
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Newmont's (NEM) Earnings & Revenues Miss Estimates in Q4
Gold mining giant Newmont Mining Corporation (NEM - Free Report) posted net loss from continuing operations (as reported) of $391 million or 73 cents per share in fourth-quarter 2016. Losses widened 41.7% from $276 million or 54 cents per share recorded a year ago. The company recorded a non-cash impairment charge of $970 million in the quarter associated with the closure of its Yanacocha gold mine in Peru.
Baring one-time items, adjusted earnings were 33 cents per share for the quarter, missing the Zacks Consensus Estimate of 39 cents.
Newmont's revenues of $1,789 million for the quarter jumped 23.2% from $1,452 million in the year-ago quarter owing to higher gold sales and improved pricing. However, revenues missed the Zacks Consensus Estimate of $1,807 million.
In fourth-quarter 2016, average net realized gold price was $1,193 per ounce, reflecting a year-over-year increase of 9.1%. The average net realized copper price was $2.49 per pound, representing a year-over-year increase of 29%.
Newmont's attributable gold production increased 17.2% year over year to 1.32 million ounces in the quarter. The increase can be attributed to production at Merian, Long Canyon and Cripple Creek & Victor offsetting grade reduction at Yanacocha. Attributable copper production of 13,000 tons in the quarter remained mostly unchanged year over year.
Costs applicable to sales (CAS) were $681 per ounce for gold in the quarter, declining 5.4% year over year. Copper CAS in the reported quarter was $1.88 per pound, an increase of 11.2% year over year. Lower-cost ounces from Long Canyon, Merian and Cripple Creek & Victor coupled with favorable oil prices and exchange rates offset reduced grades and higher non-cash inventory costs at Yanacocha and Ahafo.
All-in sustaining costs (AISC) of $918 per ounce for gold fell roughly 11.4% year over year while $2.31 per pound for copper was up almost 11% year over year. Gold AISC improved over the prior-year period due to lower sustaining capital and advanced projects spend.
Newmont Mining Corporation Price, Consensus and EPS Surprise
Newmont Mining Corporation Price, Consensus and EPS Surprise | Newmont Mining Corporation Quote
Regional Performance
North America
Attributable gold production in North America in the fourth quarter was 551,000 ounces, rising 29% year over year. Consolidated copper production was at 4,000 tons, down from the 5,000 tons figure recorded in the year-ago quarter.
Gold CAS for the region was $721 per ounce, down 12.4%, and copper CAS was $2.44 per pound, increasing 14%.
South America
Attributable gold production in South America was 166,000 ounces, climbing 53.7% year over year. Gold CAS for this region declined 12% year over year to $631 per ounce.
Asia Pacific
Attributable gold and copper production in the Asia Pacific region was 396,000 ounces, inching up 0.7% year over year, and 9,000 tons, on par with the year-ago quarter, respectively. Gold and copper CAS for this region was $642 per ounce, down 4.6%, and $1.68 per pound, up 6.3%, respectively.
Africa
The region produced 210,000 ounces of gold in the reported quarter, up 4.5% year over year. Gold CAS was $768 per ounce increasing 32.6% year over year.
Financial Position
Net cash provided by continuing operating activities was $590 million in the fourth quarter, compared with $284 million in the prior-year quarter mainly due to increased sales and improved gold pricing.
In 2016, Newmont repaid debt worth $1.3 billion. Long-term debt reduced to $4,049 million, down 30.8% from $5,854 million a year ago.
Outlook
Newmont anticipates attributable gold production to be in the range of 4.9–5.4 million ounces in 2017. Production at Merian and Long Canyon is anticipated to compensate the impact of declines at Twin Creeks and Yanacocha.
Attributable copper production is forecast between 40,000–60,000 tons in 2017.
Gold CAS is expected to be between $700 and $750 per ounce in 2017. The company expects CAS to improve to $650 and $750 per ounce over the longer term. AISC is forecast to be between $940 and $1,000 per ounce in 2017.
Copper CAS is estimated in the range of $1.45–$1.65 per pound in 2017. AISC is expected to be between $1.85 and $2.05 per pound in 2017.
Over the longer term, Copper CAS is expected to be between $1.5 and $1.9 per pound, and copper AISC is expected to be between $1.85 and $2.25 per pound, below the previous guidance due to a shift in allocation of costs between copper and gold.
Capital spending for 2017 is expected in the range of $800–$900 million. This includes sustaining capital expenditure of between $600 million and $700 million, represents a 24% reduction from previous guidance due to cost savings and deferrals.
Price Performance
Newmont’s shares have underperformed the Zacks categorized Mining-Gold industry in the past three months. The company’s shares have gained 18.8% over this period compared with the industry’s gain of 23.6%.
Zacks Rank & Key Picks
Newmont currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies in the basic materials space include Hudbay Minerals Inc. (HBM - Free Report) , Albermale Corporation (ALB - Free Report) and BASF SA (BASFY - Free Report) .
Hudbay Minerals reported a positive surprise of 33.3% in the last quarter and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Albermale has an expected long-term growth of 10% and carries a Zacks Rank #2 (Buy).
BASF has an expected long-term growth of 7.7% and carries a Zacks Rank #2.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>