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Newmont Mining Reports Solid-Gold 1Q15 Results

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Newmont in 1Q15: A solid beat

Newmont Mining (NEM) announced its 1Q 2015 results after market close on April 23. A conference call was conducted the next day for the benefit of analysts.

The company reported adjusted EPS (earnings per share) of $0.46, well above the consensus estimate of $0.23. Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was actually $815 million, while the consensus estimate was $627 million. These results are a strong beat over market expectations. The chart above shows Newmont’s actuals versus the consensus estimates.

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Share price reaction

Newmont’s share price jumped 6.5% on April 24 because of these strong results. It gained another 2.4% on April 27 to reach $25.60, once analyst sentiment turned more positive toward the stock. Credit Suisse has upgraded Newmont to “outperform” from “neutral” based on its appreciation for the company’s operational consistency and lower costs.

Series preview

In this series, we’ll analyze the 1Q earnings of Newmont Mining. We’ll look at its production and cost performance and the reasons it was able to beat estimates.

About Newmont

Newmont Mining (NEM) is the world’s second-largest gold producer. It’s the only gold company included in the S&P 500 Index and Fortune 500. Newmont is engaged in the exploration and acquisition of gold and copper properties. It has operations in the US, Australia, Peru, Indonesia, Ghana, New Zealand, and Mexico.

Newmont has the second-largest gold reserves in the world, totaling 82.2 million ounces. In comparison, Barrick Gold (ABX) has 93 million ounces, and Goldcorp (GG) has 49.6 million ounces in gold reserves.

Investors can access the gold industry through gold-backed ETFs such as the SPDR Gold Trust (GLD) and the VanEck Vectors Gold Miners Index (GDX). ABX, NEM, and GG make up 20.2% of GDX’s holdings.

In the next part of this series, we’ll look at Newmont’s 1Q15 earnings and outlook in detail.

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