Newmont (NEM) Misses on Q3 Earnings and Revenue Estimates
Newmont Corporation NEM reported net income from continuing operations of $218 million or 28 cents per share in third-quarter 2022, compared with a loss of $8 million or a penny per share in the year-ago quarter.
Barring one-time items, adjusted earnings were 27 cents per share that missed the Zacks Consensus Estimate of 29 cents.
Newmont reported revenues of $2,634 million, down around 9% year over year. The figure missed the Zacks Consensus Estimate of $2,790 million. Sales fell due to reduced average realized metal prices (barring zinc) and lower sales volumes.
Newmont Corporation Price, Consensus and EPS Surprise
Newmont Corporation price-consensus-eps-surprise-chart | Newmont Corporation Quote
Operational Highlights
Newmont's attributable gold production in the third quarter increased roughly 3% year over year to 1.49 million ounces. Production was driven by increased ore grade milled at Ahafo, Akyem and Boddington mines.
Average realized prices of gold fell around 5% year over year to $1,691 per ounce.
The company’s costs applicable to sales (CAS) for gold were $968 per ounce, up around 17% year over year. The increase was mainly driven by lower gold sales volumes and increased direct operating costs due to higher labor costs and increased commodity input costs, including higher fuel and energy costs.
All-in sustaining costs (AISC) for gold were up around 13% year over year to $1,271 per ounce, mainly due to higher CAS per gold ounce.
Financial Position
The company ended the quarter with cash and cash equivalents of $3,058 million, down 34% year over year. At the end of the quarter, the company had long-term debt of $5,569 million, up around 12% year over year.
Net cash from continuing operations amounted to $466 million for the reported quarter.
Outlook
For 2022, Newmont continues to expect attributable gold production of 6 million ounces. The company also expects gold CAS to be $900 per ounce and AISC to be $1,150 per ounce.
Price Performance
Newmont’s shares have declined 22% in the past year compared with a 16% fall of the industry.
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Zacks Rank & Key Picks
Newmont currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Albemarle Corporation ALB, Sociedad Quimica y Minera de Chile S.A. SQM and Ryerson Holding Corporation RYI.
Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 430.7% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 5.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 8% in a year.
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 2.1% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 53% in a year. The company currently carries a Zacks Rank #1.
Ryerson Holding, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 74.2% for the current year. The consensus estimate for RYI's earnings for the current year has been revised 3.2% upward in the past 60 days.
Ryerson Holding’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 28.9%. RYI has gained around 24% over a year.
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