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Newmont's (NEM) Q4 Earnings Surpass Estimates, Sales Miss

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Newmont Corporation (NEM - Free Report) reported net income from continuing operations of $537 million or 66 cents per share in fourth-quarter 2019 against a net loss of $3 million or breakeven per share in the year-ago quarter. Fourth-quarter results gained from increased production from the acquired Goldcorp assets and higher realized gold prices.

Barring one-time items, adjusted earnings were 50 cents per share, which beat the Zacks Consensus Estimate of 48 cents.

Newmont reported revenues of $2,967 million, up 44.9% year over year. However, the figure missed the Zacks Consensus Estimate of $3,105.4 million.

2019 Highlights

In 2019, net income amounted to $2,877 million or $3.91 per share, up from of $280 million or 53 cents a year ago.

Revenues rose 34.3% year over year to roughly $9,740 million.

Operational Highlights

Newmont's attributable gold production increased around 27% year over year to 1.83 million ounces in the fourth quarter.

Average realized prices of gold rose 20% year over year to $1,478 per ounce.

The company’s costs applicable to sales (CAS) for gold was $691 per ounce, up 5% year over year.

All-in sustaining costs (AISC) for gold advanced 12% year over year to $946 per ounce primarily due to higher gold CAS per ounce and higher sustaining capital spending.

Regional Performance

North America

Attributable gold production in North America was 379,000 ounces, up roughly 165% year over year. Gold CAS for the region was $734 per ounce, down around 2% year over year.

South America

Attributable gold production in South America was 277,000 ounces, up 33% year over year. Gold CAS for the region rose around 19% to $671 per ounce.

Australia

Attributable gold in the region was 393,000 ounces, up around 3% year over year. Gold CAS in this region declined 4% year over year to $693 per ounce.

Africa

Production in the region totaled 290,000 ounces of gold in the quarter, surging 27% year over year. Gold CAS was $628 per ounce, up 8% year over year.

Financial Position

The company ended 2019 with $2.2 billion of consolidated cash. Net debt was $4.6 billion at the end of 2019, up from $0.9 billion at the end of 2018.

Net cash from operating activities surged 56.9% year over year to $2.9 billion for 2019.

Outlook

Newmont expects attributable gold production for 2020 to be 6.4 million ounces. For 2020, all-in sustaining costs for gold is projected at $975 per ounce. CAS expectation for gold is $750 per ounce.

Price Performance

Newmont’s shares have gained 30.4% in the past year against the industry’s decline of 3.9%.



Zacks Rank & Key Picks

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

Some better-ranked stocks in the basic materials space are Daqo New Energy Corp (DQ - Free Report) , Sibanye Gold Limited and Impala Platinum Holdings Limited (IMPUY - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Daqo New Energy has an expected long-term earnings growth rate of 29%. The company’s shares have gained 130.6% in the past year.

Sibanye has an expected long-term earnings growth rate of 20.4%. Its shares have returned 206% in the past year.    

Impala Platinum has an expected long-term earnings growth rate of 26.5%. The company’s shares have surged 209.7% in the past year.

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