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The gold miner missed the Zacks Consensus Estimate in three of the trailing four quarters while beating it once. For this timeframe, the company delivered a negative earnings surprise of roughly 3.9%, on average. Newmont posted an earnings surprise of 21.2% in the last reported quarter. The company’s second-quarter results are expected to reflect improved grades across a number of mines. Lower costs are also likely to have aided its performance. However, weaker gold prices might impact its results.
The stock has lost 14% in the past year against the industry’s 11.8% rise.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What Do the Estimates Say?
The Zacks Consensus Estimate for second-quarter consolidated revenues for Newmont is currently pegged at $2,870 million, which calls for a decline of around 6.2% year over year.
Some Factors to Watch
Strong production performance across a number of mines is expected to support the company’s second-quarter results. In South America, Cerro Negro is expected to continue to have delivered improved productivity, leading to higher production in the second quarter. Yanacocha is also expected to have continued strong performance with increased production, benefiting from injection leaching technology and re-leaching programs. However, production from Merian and Penasquito mines is likely to have witnessed the continued impact of lower grades.
In North America, Musselwhite and Porcupine are expected to have delivered improved productivity and grades. Production from Musselwhite is likely to have been supported by efficiency improvements. Improved productivity and mining rates are also likely to have supported production from Eleonore in the second quarter.
In Australia, performance at the Boddington mine is likely to have been aided by strong mill performance in the to-be-reported quarter along with improved production from Tanami following disruptions in the first quarter due to extensive flooding. Strong production from Ahafo driven by higher mining rates and sequentially higher production from Akyem on higher grades are also expected to support results of the company’s Africa operation in the June quarter.
Our estimate for attributable gold production is pegged at 1.41 million ounces for the quarter to be reported, which suggests a 10.8% increase on a sequential basis.
Newmont is also expected to have benefited from its actions to boost productivity and control costs in the June quarter. Benefits of lower unit costs are likely to have been reflected on its performance. Our estimate for all-in-sustaining costs stands at $1,269 per ounce, which indicates a sequential decrease of 7.8%.
Meanwhile, gold prices lost steam in February 2023 following a solid performance in January, as strong U.S. economic data propelled yields and the U.S. dollar higher. Prices, nevertheless, rebounded strongly in March, driven by the fall in the value of the U.S. dollar after the sudden collapse of Silicon Valley Bank that led skittish investors flock to safe-haven assets. Gold gained on speculation that the banking crisis will trigger less-aggressive Federal Reserve rate hikes. Prices of the yellow metal were up nearly 8% in the first quarter. However, gold lost the momentum in the second quarter with prices declining roughly 3% for the quarter. The prospects of more interest rate hikes by the U.S. Federal Reserve this year weighed on the yellow metal.
The impacts of sequentially weaker gold prices are expected to reflect on Newmont’s results in the second quarter. Our estimate for second-quarter average realized prices of gold stands at $1,828, which suggests a 4.1% decline on a sequential basis.
Our proven model does not conclusively predict an earnings beat for Newmont this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Newmont is -1.30%. This is because the Most Accurate Estimate is currently pegged at 38 cents while the Zacks Consensus Estimate stands at 39 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.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
The consensus estimate for AEM’s earnings for the second quarter is currently pegged at 54 cents.
Axalta Coating Systems Ltd. (AXTA - Free Report) , which is slated to release its earnings on Aug 1, has an Earnings ESP of +6.02%.
The consensus estimate for AXTA’s earnings for the second quarter is currently pegged at 39 cents. It currently carries a Zacks Rank #2.
Kinross Gold Corporation (KGC - Free Report) , which is scheduled to release earnings on Aug 2, has an Earnings ESP of +5.56% and carries a Zacks Rank #3.
The Zacks Consensus Estimate for earnings for KGC for the second quarter is pegged at 9 cents.
Image: Bigstock
Newmont (NEM) to Report Q2 Earnings: What's in the Cards?
Newmont Corporation (NEM - Free Report) is scheduled to report second-quarter 2023 results before the opening bell on Jul 20.
The gold miner missed the Zacks Consensus Estimate in three of the trailing four quarters while beating it once. For this timeframe, the company delivered a negative earnings surprise of roughly 3.9%, on average. Newmont posted an earnings surprise of 21.2% in the last reported quarter. The company’s second-quarter results are expected to reflect improved grades across a number of mines. Lower costs are also likely to have aided its performance. However, weaker gold prices might impact its results.
The stock has lost 14% in the past year against the industry’s 11.8% rise.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What Do the Estimates Say?
The Zacks Consensus Estimate for second-quarter consolidated revenues for Newmont is currently pegged at $2,870 million, which calls for a decline of around 6.2% year over year.
Some Factors to Watch
Strong production performance across a number of mines is expected to support the company’s second-quarter results. In South America, Cerro Negro is expected to continue to have delivered improved productivity, leading to higher production in the second quarter. Yanacocha is also expected to have continued strong performance with increased production, benefiting from injection leaching technology and re-leaching programs. However, production from Merian and Penasquito mines is likely to have witnessed the continued impact of lower grades.
In North America, Musselwhite and Porcupine are expected to have delivered improved productivity and grades. Production from Musselwhite is likely to have been supported by efficiency improvements. Improved productivity and mining rates are also likely to have supported production from Eleonore in the second quarter.
In Australia, performance at the Boddington mine is likely to have been aided by strong mill performance in the to-be-reported quarter along with improved production from Tanami following disruptions in the first quarter due to extensive flooding. Strong production from Ahafo driven by higher mining rates and sequentially higher production from Akyem on higher grades are also expected to support results of the company’s Africa operation in the June quarter.
Our estimate for attributable gold production is pegged at 1.41 million ounces for the quarter to be reported, which suggests a 10.8% increase on a sequential basis.
Newmont is also expected to have benefited from its actions to boost productivity and control costs in the June quarter. Benefits of lower unit costs are likely to have been reflected on its performance. Our estimate for all-in-sustaining costs stands at $1,269 per ounce, which indicates a sequential decrease of 7.8%.
Meanwhile, gold prices lost steam in February 2023 following a solid performance in January, as strong U.S. economic data propelled yields and the U.S. dollar higher. Prices, nevertheless, rebounded strongly in March, driven by the fall in the value of the U.S. dollar after the sudden collapse of Silicon Valley Bank that led skittish investors flock to safe-haven assets. Gold gained on speculation that the banking crisis will trigger less-aggressive Federal Reserve rate hikes. Prices of the yellow metal were up nearly 8% in the first quarter. However, gold lost the momentum in the second quarter with prices declining roughly 3% for the quarter. The prospects of more interest rate hikes by the U.S. Federal Reserve this year weighed on the yellow metal.
The impacts of sequentially weaker gold prices are expected to reflect on Newmont’s results in the second quarter. Our estimate for second-quarter average realized prices of gold stands at $1,828, which suggests a 4.1% decline on a sequential basis.
Newmont Corporation Price and EPS Surprise
Newmont Corporation price-eps-surprise | Newmont Corporation Quote
Zacks Model
Our proven model does not conclusively predict an earnings beat for Newmont this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Newmont is -1.30%. This is because the Most Accurate Estimate is currently pegged at 38 cents while the Zacks Consensus Estimate stands at 39 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.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Agnico Eagle Mines Limited (AEM - Free Report) , which is scheduled to release earnings on Jul 26, has an Earnings ESP of +3.84% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for AEM’s earnings for the second quarter is currently pegged at 54 cents.
Axalta Coating Systems Ltd. (AXTA - Free Report) , which is slated to release its earnings on Aug 1, has an Earnings ESP of +6.02%.
The consensus estimate for AXTA’s earnings for the second quarter is currently pegged at 39 cents. It currently carries a Zacks Rank #2.
Kinross Gold Corporation (KGC - Free Report) , which is scheduled to release earnings on Aug 2, has an Earnings ESP of +5.56% and carries a Zacks Rank #3.
The Zacks Consensus Estimate for earnings for KGC for the second quarter is pegged at 9 cents.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.