Newmont Tops Estimates, Flags Q4 Costs

Newmont (NYSE: NEM), the gold miner, reported record third-quarter adjusted earnings of $2.20 a share, above the $1.94 that analysts polled by Yahoo Finance expected. That compares with $1.71 a year earlier.

Q3	Consensus	Actual	Year ago
Adjusted EPS	$1.94	$2.20	$1.71
Revenue	$6.24bn	$6.36bn	$5.52bn

Sales of $6,363m were up 15% from $5,524m. Newmont shares closed today at $114.11, down 2.6%, before the results were released after the US close. In after-hours trading the shares were down 0.2%.

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Adjusted EBITDA, a measure of operating profit, was $3.95bn against $3.31bn a year ago, and free cash flow, the cash left after investment, was $1.9bn. The realised gold price was $4,317 an ounce, up from $3,539 a year earlier but below $4,414 in the second quarter.

Costs rose year on year. All-in sustaining costs (AISC), the broadest measure of what it costs to produce an ounce, were $1,454 an ounce against $1,303, though down from $1,621 in the second quarter.

Guidance is where the picture splits. Full-year production is on track for 5.3 million ounces, and Newmont improved its full-year cost guidance to $925 an ounce for costs applicable to sales (CAS) and $1,520 for AISC.

The fourth quarter looks different. Newmont guided to production of 1.365 million ounces, its strongest quarter of the year, but CAS of $1,250 an ounce and AISC of $1,900, on higher sustaining capital spending and lower co-product volumes.

Newmont ended the quarter with cash of $8.8bn and net cash of $3.2bn. It has returned $1.9bn to shareholders since its last call, including $1.6bn of buybacks, leaving $2.8bn of a $6.0bn authorisation.

Newmont expects to pay $1.95bn to Barrick, its partner in Nevada Gold Mines, in the fourth quarter under an amended agreement for the joint venture.

For the fourth quarter, analysts polled by Yahoo Finance expect earnings of $2.11 a share and revenue of $6.54bn. Yahoo shows Newmont has beaten earnings consensus in each of the last four quarters.