Newmont Mining Reports Solid 2Q15 Results

Newmont Mining (NEM) announced its 2Q15 results on July 22. A conference call was conducted the next day for the benefit of analysts.

The company reported adjusted EPS (earnings per share) of $0.26, almost in line with the consensus estimate of $0.27. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was $692 million, while the consensus estimate was $674 million. These results are almost consistent with market expectations.

Newmont’s share price dropped 4% after the results release in spite of being in line or better-than-expected results. The main reason for the drop was the broader sell-off in the gold universe due to a drop in gold prices, not any company-specific factor.

In this series, we’ll analyze Newmont Mining’s 2Q15 earnings as well as its production and cost performance. We’ll also explore why Newmont upgraded its production guidance and lowered its cost guidance for 2015.

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 United States, Australia, Peru, Indonesia, Ghana, New Zealand, and Mexico.

Newmont has the second-largest gold reserve 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 Shares (GLD) and the VanEck Vectors Gold Miners ETF (GDX). ABX, NEM, and GG make up 19.1% of GDX’s holdings.