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Why Newmont Mining Stock Fell despite the 4Q17 Earnings Beat

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Newmont Mining’s earnings beat

Newmont Mining (NEM) reported its 4Q17 earnings before the market opened on February 22. It held a conference call the same day to discuss the results with analysts.

Newmont Mining has recorded an earnings beat in each quarter of 2017, including the fourth quarter. It reported a net loss of $534 million or $0.99 per share. However, including the impact of new tax law and one-off items, its earnings per share (or EPS) came in at $0.40, which beat compared the market consensus EPS of $0.38. Its revenues came in at $1.94 billion, which also beat market expectations by $30 million.

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Stock price reaction

Despite delivering an earnings beat, Newmont’s share price fell 1.4% on February 22, which was an underperformance, given just the 0.3% decline in the VanEck Vectors Gold Miners ETF (GDX) the same day. Investors were most likely disappointed with the lower production and higher cost guidance for 2018.

Peers’ results

Among its peers Barrick Gold (ABX), Goldcorp (GG) and Kinross Gold (KGC) announced their respective results on February 14 and held the analyst call on February 15. Barrick Gold’s stock fell 2.3% on February 15, mainly due to an earnings miss. Kinross Gold’s earnings also missed consensus expectations. KGC fell 7% on February 15 on an earnings miss and lower production guidance. Goldcorp’s earnings slightly beat market expectations. GG rose 4.5% on February 15 after the conference call. Investors seemed pleased with the company’s earnings beat and future guidance.

Series preview

In this series, we’ll analyze Newmont Mining’s (NEM) 4Q17 and 2017 earnings in detail. We’ll also cover key points from the company’s 4Q17 earnings conference call.

Let’s continue to the next part of this series by looking at NEM’s 4Q17 production and revenues.

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