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Newmont Goldcorp (NEM) Q1 Earnings Top, Sales Lag Estimates

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Newmont Goldcorp Corporation (NEM - Free Report) reported net income from continuing operations of $113 million or 21 cents per share in first-quarter 2019, down from $170 million or 32 cents in the year-ago quarter.

Barring one-time items, adjusted earnings were 33 cents per share, which beat the Zacks Consensus Estimate of 26 cents.

Newmont Goldcorp delivered revenues of $1,803 million, down around 0.8% year over year. The figure missed the Zacks Consensus Estimate of $1,845.2 million.

Operational Highlights

Newmont Goldcorp's attributable gold production rose roughly 2% year over year to 1.23 million ounces in the quarter. The upside can be attributed to a full quarter of mining at Subika Underground along with higher grade at Yanacocha and Merian. The uptick was partly offset by reduced mining and lower grade at KCGM.

The company’s costs applicable to sales (CAS) for gold was $935 per ounce in the quarter, down 5% year over year.

All-in sustaining costs (AISC) for gold fell roughly 4% year over year to $907 per ounce due to lower CAS.

Regional Performance

North America

Attributable gold production in North America was 474,000 ounces, down roughly 3% year over year. Consolidated copper production totaled 4,000 tons, up roughly 33%.

Gold CAS for the region was $787 per ounce, up around 3% year over year. Copper CAS was $1.71 per pound, down roughly 9% year over year.

South America

Attributable gold production in South America was 185,000 ounces, up 28% year over year. Gold CAS for the region fell around 26% to $577 per ounce.

Australia

Attributable gold in the region was 340,000 ounces, down around 7% year over year. Copper production came in at 6,000 ounces, down roughly 33%. Gold CAS and copper CAS in this region was $756 per ounce (up 7%) and $2.06 per pound (up 23%), respectively.

Africa

Production in the region totaled 231,000 ounces of gold in the quarter, up 11% year over year. Gold CAS was $594 per ounce, down 20% year over year.

Financial Position

The company ended first-quarter 2019 with roughly $3.5 billion of cash in hand. Net debt was $0.8 billion, down from roughly $1 billion in the year-ago quarter.

Net cash from continuing operating activities surged more than two-folds year over year to $574 million.

Outlook

Newmont Goldcorp expects attributable gold production of 5.2 million ounces in 2019.

The company expects all-in sustaining costs to be $935 per ounce for 2019. Also, costs applicable to sales expectation for gold is $710 per ounce.

The company’s attributable copper production forecast for 2019 is 45,000 tons. Copper CAS is expected to rise to $2.05 per pound in 2019, while AISC is projected to rise to $2.45 per pound.

Price Performance

Newmont Goldcorp’s shares have lost 20.5% in the past year compared with the 3.8% decline of the industry.



Zacks Rank & Other Key Picks

Newmont Goldcorp currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space are Sandstorm Gold Ltd (SAND - Free Report) , Innospec Inc (IOSP - Free Report) and Fortescue Metals Group Ltd (FSUGY - Free Report) , all currently sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sandstorm Gold has an expected earnings growth rate of 200% for 2019. The company’s shares have gained 15.6% in the past year.

Innospec has an expected earnings growth rate of 3.5% for the current year. The company’s shares have appreciated 14.7% in a year’s time.

Fortescue Metals has an expected earnings growth rate of 101.5% for 2019. Its shares have surged 53.2% in a year’s time.

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