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Newmont Mining’s Q4 Results Beat Estimates, Stock Rises

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Newmont Mining’s fourth-quarter results

Newmont Mining (NEM) reported its fourth-quarter earnings results before the market opened on February 21. The company reported EPS of $0.40, which beat the consensus estimate by $0.16.

Its revenue of $2.05 billion also beat the estimate by 9.0%. Its third-quarter earnings results also beat consensus expectations.

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Production and costs

NEM’s attributable gold (GLD) production totaled 1.44 million ounces, a rise of 8.0% YoY (year-over-year), in the fourth quarter due to higher grades and recovery at the Cripple Creek & Victor and Ahafo mines. NEM’s total production of 5.1 million ounces in 2018 was in line with its guidance of 4.9 million–5.4 million ounces. Its full-year production was, however, 3% lower YoY due to lower grades at various sites.

Newmont achieved all-in sustaining costs of $845 per ounce in the fourth quarter, down 9% YoY mainly due to higher sales and lower sustaining capital. Its 2018 AISC came in at $909 per ounce, beating its guidance of $950–$990. The company reiterated its guidance of 5.2 million ounces of gold (NUGT) at an all-in sustaining cost of $935 per ounce in 2019.

Stock price reaction

Newmont stock was trending 1.1% up at 10:30 AM EST compared to the losses of 0.43%, 0.42%, and 0.65%, respectively, in the S&P 500 (SPY), the Dow Jones Industrial Average Index (DIA), and the NASDAQ Composite Index (QQQ), respectively.

The next major catalyst for the stock remains its merger proceedings with Goldcorp. As we discussed in Could the Newmont-Goldcorp Merger Form ‘The Go-To Gold Equity,’ on January 14, 2019, Newmont and Goldcorp (GG) announced that they’d entered into an agreement via which NEM will acquire all of the outstanding shares of Goldcorp in a stock-for-stock transaction valued at $10 billion. This comes close on the heels of Barrick Gold (GOLD) and Randgold Resources’ merger, which they announced in September 2018 and completed in January 2019.

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