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Newmont (NEM) Misses Earnings and Sales Estimates in Q1

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Newmont Corporation (NEM - Free Report) reported net income from continuing operations of $538 million or 67 cents per share in first-quarter 2021, down from $837 million or $1.04 per share in the year-ago quarter.

Barring one-time items, adjusted earnings were 74 cents per share that missed the Zacks Consensus Estimate of 75 cents.

Newmont reported revenues of $2,872 million, up 11% year over year.  However, the figure missed the Zacks Consensus Estimate of $3,083.5 million. The upside was driven by higher average realized metal prices, partly offset by reduced sales volumes.

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 inched down 1.3% year over year to 1.46 million ounces in the quarter, impacted by the sale of Red Lake, reduced production at Cerro Negro, lower leach pad production and the ramp down of the mill at Yanacocha, reduced mill throughput at Nevada Gold Mines and lower ore grade milled at Merian.

Average realized prices of gold increased 10% year over year to $1,751 per ounce.

The company’s costs applicable to sales (CAS) for gold was $752 per ounce, down 4% year over year.

All-in sustaining costs (AISC) for gold remained flat year over year at $1,039 per ounce. Increased sustaining capital spend and higher advanced projects spend were largely offset by lower CAS per ounce.

Regional Performance

North America: Attributable gold production for the first quarter in North America was 413,000 ounces, up 10% year over year. Gold CAS for the region was $736 per ounce, down 15% year over year.

South America: Attributable gold production in South America was 174,000 ounces, down 26% year over year. Gold CAS for the region declined 2% on a year-over-year basis to $791 per ounce.

Australia: Attributable gold in the region was 269,000 ounces, up 4% year over year. Gold CAS in the region rose 3% year over year to $750 per ounce.

Africa: Production in the region totaled 205,000 ounces of gold in the quarter, up 10% year over year. Gold CAS was $758 per ounce, up 3% year over year.

Nevada: Production totaled 303,000 ounces of gold in the quarter, down 8% year over year. Gold CAS was $745 per ounce, up 2% year over year.

Financial Position

The company ended the quarter with cash and cash equivalents of $5,518 million, up 48.7% year over year. At the end of the quarter, the company had long-term debt of $4,988 million.

Net cash from operating activities amounted to $841 million in the quarter, down 10% year over year.

Outlook

For 2021, Newmont expects attributable gold production of 6.5 million ounces. The company also expects gold CAS to be $750 per ounce and AISC to be $970 per ounce.

Newmont expects an increase in gold production and is undertaking investments in its operating assets and other growth prospects. Its development projects, Ahafo North and Yanacocha Sulfides are expected to reach execution stage in 2021. Other development projects that have not reached execution stage reflect upside to guidance.

Price Performance

Newmont’s shares have gained 7.9% in the past year compared with 64.8% surge of the industry.

Zacks Rank & Key Picks

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

Some better-ranked stocks in the basic materials space are Dow Inc. (DOW - Free Report) , Nucor Corporation (NUE - Free Report) and Impala Platinum Holdings Limited (IMPUY - Free Report) .

Dow has a projected earnings growth rate of roughly 261.5% for the current year. The company’s shares have surged 72.5% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Nucor has an expected earnings growth rate of around 228.4% for the current year. The company’s shares have gained 98.1% in the past year. It currently sports a Zacks Rank #1.

Impala has an expected earnings growth rate of 197.6% for the current fiscal. The company’s shares have skyrocketed 243.2% in the past year. It currently flaunts a Zacks Rank #1.

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