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Newmont's (NEM) Earnings and Sales Miss Estimates in Q1
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Newmont Corporation (NEM - Free Report) reported net income from continuing operations of $837 million or $1.04 per share in first-quarter 2020, up from $113 million or 21 cents in the year-ago quarter.
Barring one-time items, adjusted earnings were 40 cents per share that missed the Zacks Consensus Estimate of 43 cents.
Newmont reported revenues of $2,581 million, up 43.2% year over year. However, the figure missed the Zacks Consensus Estimate of $2,682.5 million.
Newmont Corporation Price, Consensus and EPS Surprise
Newmont's attributable gold production increased around 20% year over year to 1.5 million ounces in the fourth quarter.
Average realized prices of gold rose 22% year over year to $1,591 per ounce.
The company’s costs applicable to sales (CAS) for gold was $1,140 per ounce, up 21.9% year over year.
All-in sustaining costs (AISC) for gold increased 14% year over year to $1,030 per ounce mainly due to higher gold CAS per ounce along with higher sustaining capital spending and maintenance costs related to the coronavirus pandemic.
Regional Performance
North America
Attributable gold production in North America was 376,000 ounces, up roughly 364% year over year. Gold CAS for the region was $863 per ounce, down around 3% year over year.
South America
Attributable gold production in South America was 235,000 ounces, up 27% year over year. Gold CAS for the region rose around 40% to $806 per ounce.
Australia
Attributable gold in the region was 258,000 ounces, down around 24% year over year. Gold CAS in this region declined 3% year over year to $730 per ounce.
Africa
Production in the region totaled 186,000 ounces of gold in the quarter, down 19% year over year. Gold CAS was $737 per ounce, up 24% year over year.
Financial Position
The company ended the first quarter with $3.7 billion of consolidated cash. Long-term debt was $6,030 million, up 76.3% on a year-over-year basis.
Net cash from operating activities were $936 million in the first quarter.
Outlook
In March, Newmont withdrew its 2020 outlook as some production may be deferred into 2021 that could potentially impact costs in 2020.
The company stated that it is well positioned to efficiently ramp up mining operations in a timely manner. Despite shorter-term disruptions stemming from challenging macro-economic environment, its long-term value proposition remains unchanged. Newmont continues to have the industry-leading gold mineral reserves of 95.7 million ounces.
Price Performance
Newmont’s shares have surged 109.5% in the past year against the industry’s decline of 14.4%.
Agnico Eagle has an expected earnings growth rate of 58.8% for 2020. The company’s shares have surged 55% in the past year.
Barrick has an expected earnings growth rate of 70.6% for 2020. Its shares have returned 117.3% in the past year.
Franco-Nevada has an expected earnings growth rate of 22% for 2020. The company’s shares have surged 101.2% in the past year.
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Newmont's (NEM) Earnings and Sales Miss Estimates in Q1
Newmont Corporation (NEM - Free Report) reported net income from continuing operations of $837 million or $1.04 per share in first-quarter 2020, up from $113 million or 21 cents in the year-ago quarter.
Barring one-time items, adjusted earnings were 40 cents per share that missed the Zacks Consensus Estimate of 43 cents.
Newmont reported revenues of $2,581 million, up 43.2% year over year. However, the figure missed the Zacks Consensus Estimate of $2,682.5 million.
Newmont Corporation Price, Consensus and EPS Surprise
Newmont Corporation price-consensus-eps-surprise-chart | Newmont Corporation Quote
Operational Highlights
Newmont's attributable gold production increased around 20% year over year to 1.5 million ounces in the fourth quarter.
Average realized prices of gold rose 22% year over year to $1,591 per ounce.
The company’s costs applicable to sales (CAS) for gold was $1,140 per ounce, up 21.9% year over year.
All-in sustaining costs (AISC) for gold increased 14% year over year to $1,030 per ounce mainly due to higher gold CAS per ounce along with higher sustaining capital spending and maintenance costs related to the coronavirus pandemic.
Regional Performance
North America
Attributable gold production in North America was 376,000 ounces, up roughly 364% year over year. Gold CAS for the region was $863 per ounce, down around 3% year over year.
South America
Attributable gold production in South America was 235,000 ounces, up 27% year over year. Gold CAS for the region rose around 40% to $806 per ounce.
Australia
Attributable gold in the region was 258,000 ounces, down around 24% year over year. Gold CAS in this region declined 3% year over year to $730 per ounce.
Africa
Production in the region totaled 186,000 ounces of gold in the quarter, down 19% year over year. Gold CAS was $737 per ounce, up 24% year over year.
Financial Position
The company ended the first quarter with $3.7 billion of consolidated cash. Long-term debt was $6,030 million, up 76.3% on a year-over-year basis.
Net cash from operating activities were $936 million in the first quarter.
Outlook
In March, Newmont withdrew its 2020 outlook as some production may be deferred into 2021 that could potentially impact costs in 2020.
The company stated that it is well positioned to efficiently ramp up mining operations in a timely manner. Despite shorter-term disruptions stemming from challenging macro-economic environment, its long-term value proposition remains unchanged. Newmont continues to have the industry-leading gold mineral reserves of 95.7 million ounces.
Price Performance
Newmont’s shares have surged 109.5% in the past year against the industry’s decline of 14.4%.
Zacks Rank & Other Key Picks
Newmont currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the basic materials space are Agnico Eagle Mines Limited (AEM - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and Franco-Nevada Corporation (FNV - Free Report) , all carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Agnico Eagle has an expected earnings growth rate of 58.8% for 2020. The company’s shares have surged 55% in the past year.
Barrick has an expected earnings growth rate of 70.6% for 2020. Its shares have returned 117.3% in the past year.
Franco-Nevada has an expected earnings growth rate of 22% for 2020. The company’s shares have surged 101.2% in the past year.
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The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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