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Newmont's (NEM) Earnings and Sales Surpass Estimates in Q2

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Newmont Corporation (NEM - Free Report) reported net income from continuing operations of $640 million or 80 cents per share in second-quarter 2021, up from $412 million or 51 cents per share in the year-ago quarter.

Barring one-time items, adjusted earnings were 83 cents per share that beat the Zacks Consensus Estimate of 76 cents.

Newmont reported revenues of $3,065 million, up 29.6% year over year.  The figure topped the Zacks Consensus Estimate of $3,063.8 million. The upside was driven by higher average realized metal prices and sales volume.

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 second quarter increased 15.1% year over year to 1.45 million ounces in the quarter, driven by higher production from sites that saw lower operations or were placed into care and maintenance last year due to the pandemic, higher ore grade milled as well as increased mill throughput at Boddington.

Average realized prices of gold increased 6% year over year to $1,823 per ounce.

The company’s costs applicable to sales (CAS) for gold was $1,091 per ounce, up 16% year over year.

All-in sustaining costs (AISC) for gold fell 6% year over year at $1,035 per ounce, mainly due to care and maintenance costs in the prior-year quarter. This was partly offset by increased sustaining capital spend.

Regional Performance

North America: Attributable gold production in the second quarter in North America was 397,000 ounces, up 71% year over year. Gold CAS in the region was $769 per ounce, up 5% year over year.

South America: Attributable gold production in South America was 189,000 ounces, up 39% year over year. Gold CAS for the region declined 8% on a year-over-year basis to $721 per ounce.

Australia: Attributable gold in the region was 299,000 ounces, up 2% year over year. Gold CAS in the region rose 6% year over year to $764 per ounce.

Africa: Production in the region totaled 202,000 ounces of gold in the quarter, up 5% year over year. Gold CAS was $763 per ounce, up 10% year over year.

Nevada: Production totaled 284,000 ounces of gold in the quarter, down 13% year over year. Gold CAS was $753 per ounce, down 6% year over year.

Financial Position

The company ended the quarter with cash and cash equivalents of $4,583 million, up 20.3% year over year. At the end of the quarter, the company had long-term debt of $4,989 million.

Net cash from operating activities amounted to $995 million in the quarter, up 49.8% 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 project, Yanacocha Sulfides is expected to reach execution stage in December 2021. Other development projects that have not reached execution stage reflect upside to guidance.

Price Performance

Newmont’s shares have declined 8.3% in the past year against 27.9% rally of the industry.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank & Key Picks

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

Some better-ranked stocks in the basic materials space are Nucor Corporation (NUE - Free Report) , Dow Inc. (DOW - Free Report) and Cabot Corporation (CBT - Free Report) .

Nucor has a projected earnings growth rate of around 447.6% for the current year. The company’s shares have surged 118.1% 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.

Dow has an expected earnings growth rate of around 359.6% for the current year. The company’s shares have skyrocketed 39.5% in the past year. It currently sports a Zacks Rank #1.

Cabot has an expected earnings growth rate of around 137.5% for the current fiscal. The company’s shares have surged 35.5% in the past year. It currently flaunts a Zacks Rank #1.


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