Newmont's Third Quarter Earnings Fall Short, Revenue Surprises

Gold Miner Reports Lower-than-Expected Earnings

Revenue Beats Analyst Projections, Bolstered by Higher Gold Prices

Newmont Corporation, the world's largest gold producer, reported its third-quarter earnings on Wednesday, October 26, 2022, missing analyst expectations. However, the company's revenue surpassed estimates, driven by higher gold prices during the quarter.

Newmont's net income for the quarter was $494 million, or $1.13 per share, down from $635 million, or $1.49 per share, in the same period last year. The decline in earnings was primarily due to lower production volumes and higher costs.

Revenue for the quarter rose by 11.5% to $3.32 billion, exceeding analysts' estimates of $3.26 billion. The increase in revenue was driven by higher realized gold prices, which averaged $1,733 per ounce during the quarter, compared to $1,718 per ounce in the previous year's quarter.

Gold production for the quarter was 1.45 million ounces, down from 1.54 million ounces in the third quarter of 2021. The decrease in production was attributed to lower grades and recoveries at some of the company's mines.

Despite the production decline, Newmont's all-in sustaining costs (AISC), a measure of mining costs, improved to $1,256 per ounce from $1,282 per ounce in the prior-year quarter. The improvement in AISC was driven by lower fuel and materials costs, as well as higher by-product credits.

Newmont maintained its full-year production guidance of 6.2 million to 6.7 million ounces of gold. The company also reaffirmed its cost guidance, expecting AISC to be between $1,225 and $1,275 per ounce for the full year.

Analysts remain cautious about the company's near-term prospects due to ongoing cost pressures and potential weakness in gold prices. However, they continue to view Newmont as a long-term leader in the gold mining industry, given its strong asset base and commitment to operational excellence.

Conclusion:

Newmont's third-quarter results were mixed, with earnings falling short of expectations but revenue surpassing estimates. The company's strong revenue growth was driven by higher gold prices during the quarter, while production declines and higher costs weighed on earnings. Despite the earnings miss, Newmont remains a significant player in the gold mining industry, with a strong asset base and a commitment to operational excellence.