Newmont Corporation NEM reported net income from continuing operations of $412 million or 51 cents per share in second-quarter 2020, up from $1 million or breakeven per share in the year-ago quarter.
Barring one-time items, adjusted earnings were 32 cents per share that missed the Zacks Consensus Estimate of 34 cents.
Newmont reported revenues of $2,365 million, up 4.8% year over year. However, the figure missed the Zacks Consensus Estimate of $2,368.4 million.
Newmont Corporation Price, Consensus and EPS Surprise
Newmont Corporation price-consensus-eps-surprise-chart | Newmont Corporation Quote
Newmont's attributable gold production declined 20.8% year over year to 1.26 million ounces in the quarter.
Average realized prices of gold rose 31% year over year to $1,724 per ounce.
The company’s costs applicable to sales (CAS) for gold was $748 per ounce, down 1% year over year.
All-in sustaining costs (AISC) for gold increased 8% year over year to $1,097 per ounce. The uptick was mainly due to care and maintenance costs related to the coronavirus pandemic, which was partly offset by lower sustaining capital spending.
North America: Attributable gold production in North America was 232,000 ounces, down 8% year over year. Gold CAS for the region was $735 per ounce, down 29% year over year.
South America: Attributable gold production in South America was 136,000 ounces, down 48% year over year. Gold CAS for the region rose 20% on a year-over-year basis to $781 per ounce.
Australia: Attributable gold in the region was 294,000 ounces, down 18% year over year. Gold CAS in the region dropped 1% year over year to $719 per ounce.
Africa: Production in the region totaled 193,000 ounces of gold in the quarter, down 30% year over year. Gold CAS was $696 per ounce, up 16% year over year.
The company ended the second quarter with cash and cash equivalents of $3,808 million, up 108.4% year over year. Long-term debt was $5,478 million, up from $5,475 million in the prior-year quarter.
Net cash from operating activities amounted to $664 million in the quarter.
For 2020, Newmont projects attributable gold production of around 6 million ounces. Gold CAS is projected at $760 per ounce and AISC is expected to be $1,015 per ounce on higher sustaining capital spending.
The company is progressing with majority of its development and sustaining capital projects, including Tanami Expansion 2 and Subika Underground as well as advancing laybacks at Boddington and Ahafo.
Newmont’s shares have surged 85.9% in the past year compared with the industry’s 11.5% rise.
Zacks Rank & Key Picks
Newmont currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space include Equinox Gold Corp. EQX, B2Gold Corp BTG and Northern Dynasty Minerals Ltd. NAK, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Equinox Gold has an expected earnings growth rate of 255.2% for 2020. The company’s shares have surged 100.9% in the past year.
B2Gold has an expected earnings growth rate of 257.1% for 2020. Its shares have returned 112.4% in the past year.
Northern Dynasty has an expected earnings growth rate of 35.7% for 2020. The company’s shares have gained 118.2% in the past year.
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