What’s in the Cards for Newmont Mining’s Q4 Results?



Newmont Mining’s earnings

Newmont Mining (NEM) is scheduled to release its Q4 2018 earnings on February 21 before the market opens. The company will hold a conference call the same day at 10:00 AM EST. In its Q3 2018 earnings, Newmont reported EPS of $0.33, which beat the consensus estimate by $0.14. Its revenue of $1.73 billion, however, missed the estimate by 19.0%. Newmont also narrowed its gold production guidance to 4.9 million–5.2 million ounces of gold (GLD) from 4.9 million–5.4 million ounces earlier. Still, the company is set to achieve its record fourth-quarter production this year due to planned higher grades at Leeville, Yanacocha, and Ahafo.

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Analysts’ expectations

Analysts expect Newmont to report revenues of $1.88 billion for Q4, a decline of 3% year-over-year. Its EBITDA is expected to come in at $601 million, implying a margin of 32.1%. Apart from an update on its growth projects, investors will be watching for an update on its merger proceedings with Goldcorp (GG).

Newmont-Goldcorp merger

Yesterday, the Canadian Competition Bureau cleared the way for Newmont’s planned merger with Goldcorp. As we discussed in Could the Newmont-Goldcorp Merger Form ‘The Go-To Gold Equity,’ on January 14, 2019, both the companies announced that they entered an agreement in 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 announced in September 2018 and completed in January.

Newmont’s stock has underperformed peers (GDX) and broader markets (SPY) year-to-date with a decline of 0.3% as of February 19. GDX has gained 9.7% in the same period. Peers Kinross Gold (KGC) and Yamana Gold (AUY) have gained 16.4% and 18.2%, respectively.


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