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What Could Drive Newmont Mining’s Stock in the Rest of 2018?

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NEM’s latest earnings

Newmont Mining (NEM) reported its second-quarter earnings before the market opened on July 26 and held its conference call the same day. The company reported EPS of $0.26, which beat the consensus expectations by $0.02. Its revenues of $1.66 billion, however, missed expectations by 7.0%.

NEM’s attributable gold production for the second quarter totaled 1.16 million ounces, a decline of 14.0% YoY (year-over-year). The decline was mainly due to lower grades at Carlin, Twin Creeks, Boddington, and Akyem. Along with a decline in gold production, its all-in sustaining costs (or AISC) increased 16.0% YoY to $1,024 per ounce.

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Peers’ results

Among Newmont’s peers that recently released their second-quarter results, Barrick Gold (ABX)Goldcorp (GG), and Agnico Eagle Mines (AEM) missed their earnings estimates. Agnico Eagle Mines missed its earnings estimate by a wide margin, reporting EPS of $0.01 compared to the consensus estimate of $0.08. 

Goldcorp and Barrick Gold reported EPS of $0.02 and $0.07, respectively, and missed their estimates of $0.06 and $0.04. These companies released their second-quarter results on July 25 after the market closed. Yamana Gold (AUY) and Kinross Gold (KGC), on the other hand, reported earnings that were in line with market expectations.

Newmont has come a long way

Newmont Mining (NEM) has come a long way with respect to asset restructuring, debt handling, and growth options. After accumulating debt at the peak of the cycle in 2011, the company has shifted gears to portfolio restructuring, which involves selling non-core and high-cost assets.

In this series, we’ll analyze Newmont Mining’s (NEM) latest results and its performance forecast. We’ll also look at the company’s production profile, cost profile, balance sheet strength, and growth options. Continue to the next part of this series for a look at NEM’s production profile.

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