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Newmont (NEM) to Report Q1 Earnings: What's in the Cards?

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Newmont Corporation NEM is scheduled to report first-quarter 2021 results before the opening bell on Apr 29.

The gold miner surpassed the Zacks Consensus Estimate in two of the trailing four quarters while missed twice. For this timeframe, the company delivered an earnings surprise of 1.9%, on average. Newmont posted an earnings surprise of 11.6% in the last reported quarter. The company’s first-quarter results are expected to reflect the benefits of higher year-over-year gold prices.

The stock has gained 4.2% in the past year compared with the industry’s 61.9% rise.

Let’s see how things are shaping up for this announcement.

What Do the Estimates Say?

The Zacks Consensus Estimate for first-quarter consolidated revenues for Newmont is currently pegged at $3,245 million, which calls for a rise of 25.7% year over year.

Some Factors at Play

Benefits of higher year-over-year gold prices are likely to reflect on the company’s results in the to-be-reported quarter. Gold had a strong run in 2020 with prices gaining around 25% as fears over the coronavirus pandemic made it the most attractive safe-haven asset. Apprehensions regarding the global economic growth fueled safe haven demand for the metal last year. The ultra-low interest rate environment and geopolitical tensions also spurred up demand for gold. Moreover, fears over supply crunch stemming from suspensions of operations by miners per government mandates to curb the virus spread also contributed to the rally in gold prices.

However, the yellow metal lost the momentum this year, largely due to vaccine rollouts and optimism over economic recovery. Notably, gold prices dipped below $1,700 per ounce to the lowest level in nine months in early March 2021 on strengthening U.S. dollar and an uptrend in treasury yields. Notwithstanding the decline, Newmont is likely to have benefited from higher averaged realize gold prices on a year-over-year basis in the March quarter, which is expected to have supported its top line and margins.

However, the impacts of operational restrictions in certain countries including Argentina due to the pandemic are likely to have affected the company’s production in the first quarter. The company witnessed a double-digit year-over-year decline in gold production in the fourth quarter, partly due to reduced production at Cerro Negro in Argentina amid government restrictions associated with the pandemic. Some pandemic-induced impacts are likely to have continued in the March quarter.

Newmont Corporation Price and EPS Surprise

Newmont Corporation Price and EPS Surprise
Newmont Corporation Price and EPS Surprise

Newmont Corporation price-eps-surprise | Newmont Corporation Quote

Zacks Model

Our proven model does not conclusively predict an earnings beat for Newmont this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Newmont is -9.20%. The Zacks Consensus Estimate for earnings for the first quarter is currently pegged at 80 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 #4 (Sell).

Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

AdvanSix Inc. ASIX, scheduled to release earnings on Apr 30, has an Earnings ESP of +7.69% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Mosaic Company MOS, scheduled to release earnings on May 3, has an Earnings ESP of +9.00% and carries a Zacks Rank #3.

CF Industries Holdings, Inc. CF, scheduled to release earnings on May 5, has an Earnings ESP of +38.03% and carries a Zacks Rank #3.

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CF Industries Holdings, Inc. (CF) : Free Stock Analysis Report

Newmont Corporation (NEM) : Free Stock Analysis Report

The Mosaic Company (MOS) : Free Stock Analysis Report

AdvanSix Inc. (ASIX) : Free Stock Analysis Report

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