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Newmont (NEM) Q2 Earnings and Sales Fall Short of Estimates
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Newmont Corporation (NEM - Free Report) reported earnings from continuing operations of 19 cents per share for second-quarter 2023 compared with earnings of 48 cents reported in the year-ago quarter.
Barring one-time items, adjusted earnings were 33 cents per share, down from 46 cents reported in the prior-year quarter. It lagged the Zacks Consensus Estimate of 39 cents.
The company’s revenues for the second quarter were $2,683 million, down around 12% year over year. The figure also missed the Zacks Consensus Estimate of $2,870.1 million.
Newmont's second-quarter performance was impacted by higher costs and lower production. However, the outlook for the second half of the year is positive, with expectations of cost reduction.
Newmont Corporation Price, Consensus and EPS Surprise
Newmont's attributable gold production for the second quarter was 1.24 million ounces, registering a decline of 17.3% from 1.5 million ounces reported in the same period last year. Additionally, the production for the quarter was lower than our estimate of 1.41 million ounces.
Average realized prices of gold rose around 7% year over year to $1,965 per ounce. It surpassed our estimate of $1,828.
Newmont reported a rise in Costs Applicable to Sales (CAS) for gold, amounting to $1,054 per ounce, reflecting a significant increase of 13.1% from the previous year. The primary factor contributing to this surge was lower gold sales volumes during the period.
All-in-sustaining costs (AISC) for gold were up around 22.8% year over year to $1,472 per ounce. This figure was higher than our estimate of $1,269 per.
Financials
The company ended the quarter with cash and cash equivalents of $2,829 million, down around 1.7% year over year. At the end of the quarter, the company had a long-term debt of $5,574 million, flat year over year.
Net cash from continuing operations amounted to $656 million for the reported quarter.
Guidance
Newmont said that it is on track to achieve attributable gold production guidance of 5.7-6.3 million ounces. The company also expects gold CAS between $870 and $970 per ounce, and AISC within $1,150-$1,250 per ounce.
The company expects a rise in gold production through ongoing investments in operating assets and promising growth prospects. It has set a reserves and mine planning gold price assumption at $1,400 per ounce. Newmont assumes a revenue gold price of $1,700 per ounce for CAS and AISC, including royalties and production taxes for 2023. The company also considers normalizing levels of inflation, projecting an average escalation rate of around 3% year over year.
Development capital, costs and production related to projects, such as Tanami Expansion 2, Ahafo North, Pamour, and Cerro Negro District Expansion 1, are key components of Newmont's outlook. The Yanacocha Sulfides project faces a deferred investment decision, leading to a reduction in expected capital spend for 2024 by $300 million.
Price Performance
Newmont’s shares have lost 17.1% in the past year against an 11.7% rise of the industry.
The Zacks Consensus Estimate for PPG’s current-year earnings has been revised 6.3% upward in the past 90 days. PPG beat the Zacks Consensus Estimate in three of the last four quarters and missed once, with the average earnings surprise being 6.8%. The company’s shares have gained 25.1% in the past year.
The Zacks Consensus Estimate for ATI’s current-year earnings has been revised 3.7% upward in the past 60 days. ATI beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 13%. The company’s shares have rallied 87.5% in the past year.
The Zacks Consensus Estimate for X’s current-year earnings has been revised 5.4% upward in the past 60 days. U. S. Steel beat the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 18.1% on average. The company’s shares have risen roughly 24.8% in the past year.
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Newmont (NEM) Q2 Earnings and Sales Fall Short of Estimates
Newmont Corporation (NEM - Free Report) reported earnings from continuing operations of 19 cents per share for second-quarter 2023 compared with earnings of 48 cents reported in the year-ago quarter.
Barring one-time items, adjusted earnings were 33 cents per share, down from 46 cents reported in the prior-year quarter. It lagged the Zacks Consensus Estimate of 39 cents.
The company’s revenues for the second quarter were $2,683 million, down around 12% year over year. The figure also missed the Zacks Consensus Estimate of $2,870.1 million.
Newmont's second-quarter performance was impacted by higher costs and lower production. However, the outlook for the second half of the year is positive, with expectations of cost reduction.
Newmont Corporation Price, Consensus and EPS Surprise
Newmont Corporation price-consensus-eps-surprise-chart | Newmont Corporation Quote
Operational Highlights
Newmont's attributable gold production for the second quarter was 1.24 million ounces, registering a decline of 17.3% from 1.5 million ounces reported in the same period last year. Additionally, the production for the quarter was lower than our estimate of 1.41 million ounces.
Average realized prices of gold rose around 7% year over year to $1,965 per ounce. It surpassed our estimate of $1,828.
Newmont reported a rise in Costs Applicable to Sales (CAS) for gold, amounting to $1,054 per ounce, reflecting a significant increase of 13.1% from the previous year. The primary factor contributing to this surge was lower gold sales volumes during the period.
All-in-sustaining costs (AISC) for gold were up around 22.8% year over year to $1,472 per ounce. This figure was higher than our estimate of $1,269 per.
Financials
The company ended the quarter with cash and cash equivalents of $2,829 million, down around 1.7% year over year. At the end of the quarter, the company had a long-term debt of $5,574 million, flat year over year.
Net cash from continuing operations amounted to $656 million for the reported quarter.
Guidance
Newmont said that it is on track to achieve attributable gold production guidance of 5.7-6.3 million ounces. The company also expects gold CAS between $870 and $970 per ounce, and AISC within $1,150-$1,250 per ounce.
The company expects a rise in gold production through ongoing investments in operating assets and promising growth prospects. It has set a reserves and mine planning gold price assumption at $1,400 per ounce. Newmont assumes a revenue gold price of $1,700 per ounce for CAS and AISC, including royalties and production taxes for 2023. The company also considers normalizing levels of inflation, projecting an average escalation rate of around 3% year over year.
Development capital, costs and production related to projects, such as Tanami Expansion 2, Ahafo North, Pamour, and Cerro Negro District Expansion 1, are key components of Newmont's outlook. The Yanacocha Sulfides project faces a deferred investment decision, leading to a reduction in expected capital spend for 2024 by $300 million.
Price Performance
Newmont’s shares have lost 17.1% in the past year against an 11.7% rise of the industry.
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 include PPG Industries, Inc. (PPG - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and ATI Inc, (ATI - Free Report) and United States Steel Corporation (X - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for PPG’s current-year earnings has been revised 6.3% upward in the past 90 days. PPG beat the Zacks Consensus Estimate in three of the last four quarters and missed once, with the average earnings surprise being 6.8%. The company’s shares have gained 25.1% in the past year.
The Zacks Consensus Estimate for ATI’s current-year earnings has been revised 3.7% upward in the past 60 days. ATI beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 13%. The company’s shares have rallied 87.5% in the past year.
The Zacks Consensus Estimate for X’s current-year earnings has been revised 5.4% upward in the past 60 days. U. S. Steel beat the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 18.1% on average. The company’s shares have risen roughly 24.8% in the past year.