Will Higher Production Drive Newmont's (NEM) Q4 Earnings?
Newmont Corporation NEM is scheduled to report fourth-quarter 2022 results before the opening bell on Feb 23.
The gold miner missed the Zacks Consensus Estimate in three of the trailing four quarters while beat the same once. For this timeframe, the company delivered a negative earnings surprise of roughly 7.6%, on average. Newmont posted a negative earnings surprise of 6.9% in the last reported quarter. The company’s fourth-quarter results are expected to reflect higher production on improved grades across a number of mines. Improved gold prices and lower costs are also likely to have aided its performance.
The stock has lost 32.9% in the past year compared with the industry’s 10.8% decline.
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Let’s see how things are shaping up for this announcement.
Our proven model predicts an earnings beat for Newmont this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.
Earnings ESP: Earnings ESP for Newmont is +11.41%. The Zacks Consensus Estimate for the fourth quarter is currently pegged at 42 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Newmont currently carries a Zacks Rank #3.
What Do the Estimates Say?
The Zacks Consensus Estimate for fourth-quarter consolidated revenues for Newmont is currently pegged at $2,921 million, which calls for a decline of around 13.9% year over year.
The Zacks Consensus Estimate for fourth-quarter average realized prices of gold stands at $1,781, suggesting a 5.3% rise on a sequential comparison basis. The same for the attributable gold production is pegged at 1.72 million ounces, indicating a 15.7% sequential rise.
Some Factors to Watch For
Improved production performance is expected to have supported the company’s fourth-quarter results. In South America, the Merian mine is likely to have delivered higher production on improved mill performance and higher ore grade. Cerro Negro is expected to continue to have delivered improved productivity.
The company is also likely to have witnessed higher production at Nevada Gold Mines in the fourth quarter on the back of higher grades. In Canada, Musselwhite is expected to have delivered improved productivity and grades. In Australia, performance at the Boddington mine is likely to have been aided by higher ore grades in the to-be-reported quarter. Strong production in Ahafo, driven by improved mining rates and higher ore grade, is also expected to have driven results in the company’s Africa operation in the December quarter.
Newmont is also expected to have benefited from its actions to boost productivity and control costs in the fourth quarter. Benefits of lower unit costs are likely to reflect on its performance.
Meanwhile, gold prices regained ground in the fourth quarter after remaining under pressure in the second and third quarter. Prices crossed the $1,700 an ounce mark in November as the Fed meeting that month signaled a likelihood of a slowdown of rate hikes.
Gold prices also broke above the $1,800 per ounce level in December as signs of cooling U.S. inflation raised expectations of a less aggressive policy stance by the Federal Reserve. Prices of the yellow metal were up around 10% in the fourth quarter.
Improved gold prices are expected to have supported Newmont’s performance in the December quarter.
Newmont Corporation Price and EPS Surprise
Newmont Corporation price-eps-surprise | Newmont Corporation Quote
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Quaker Chemical Corporation KWR, slated to release earnings on Feb 23, has an Earnings ESP of +7.38%.
The Zacks Consensus Estimate for Quaker Chemical’s fourth-quarter earnings is currently pegged at $1.22. KWR currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Americas Gold and Silver Corporation USAS, expected to release earnings on Mar 16, has an Earnings ESP of +11.11%.
The Zacks Consensus Estimate for Americas Gold and Silver’s fourth-quarter earnings is currently pegged at a loss of 2 cents. USAS currently carries a Zacks Rank #3.
Eldorado Gold Corporation EGO, slated to release earnings on Feb 23, has an Earnings ESP of +3.13%.
The Zacks Consensus Estimate for Eldorado Gold’s fourth-quarter earnings is currently pegged at 5 cents. EGO currently carries a Zacks Rank #3.
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