Newmont Corporation (NEM) on Q1 2022 Results - Earnings Call Transcript
Operator: Good morning, and welcome to Newmont’s First Quarter 2022 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Tom Palmer, President and Chief Executive Officer. Please go ahead. Tom Palmer: Good morning, and thank you for joining Newmont’s first quarter 2022 earnings call. Today, I'm joined by Rob Atkinson and Nancy Buese, along with other members of our executive team. And we will be available to answer questions at the end of the call. Before I begin, please note our cautionary statement and refer to our SEC filings, which can be found on our website. Newmont delivered on a challenging first quarter, as our operations and the mining industry as a whole, safely managed through the Omicron surge over the first three months of this year. As we emerge on the other side of this wave, Newmont remains well positioned to deliver solid performance in 2022, leveraging our scale and proven operating model to deliver long-term value from the world's best mining jurisdictions. The strength of our people and stability of our global portfolio, not only allows us to endure our short-term disruptions, it is the foundation of Newmont’s clear and consistent strategy to create value and improve lives through sustainable and responsible mining. Turning to our quarterly results, let's take a look at the highlights. During the first quarter, Newmont produced 1.3 million ounces of gold and 350,000 gold equivalent ounces from copper, silver, lead and zinc. And despite challenges from the Omicron surge and the knock-on impacts from this global pandemic, we remain on track to achieve our full year guidance ranges as we build momentum for a strong second half. I recently visited Ahafo and Akyem in Ghana as well as the Boddington mine in Australia, where I saw firsthand the significant efforts our teams are taking to protect the health and safety of our workforce while continuing to move critical projects forward. With $7.3 billion in total liquidity, we have a net debt to EBITDA ratio 0.3 times, preserving Newmont's financial strength and flexibility to sustain and grow the business. We also continue to invest in and develop our most profitable near-term projects, including Ahafo mill, the second inspection at Tanami and Yanacocha Sulfides. Just last week, we announced the acquisition of Sumitomo’s interest in Yanacocha, which will bring Newmont’s ownership in this operation and the exciting sulfides project to 100%. And yesterday, we declared a first quarter dividend of $0.55 per share set within our established dividend framework and consistent with our last five quarters. Newmont’s core values of safety, sustainability, integrity, inclusion and responsibility are essential to creating long-term value for our investors, most governments, communities and employees. Last week, Newmont launched its 18th annual sustainability report, providing a transparent look at our ESG performance and the issues and metrics that matter most to our stakeholders. And in March, we committed $5 million to provide relief and medical supplies to the millions of people affected by the war in Ukraine. We take pride in being a value-driven organization and our core values are fundamental to how we run our business and where we choose to operate. In line with the geopolitical events and the Omicron surge that have impacted so many around the world, our commitment to sustainable and responsible mining is more relevant today than ever before. During our fourth quarter earnings call in late February, we've provided an update on how the Omicron surge and the lingering effects of the pandemic were affecting our operations and the impacts that our stakeholders could expect in the first quarter. As you can see here on the slide, over the first three months of this year, we saw the largest spike in positive COVID cases at Newmont since the start of pandemic. And this graph only shows positive cases and does not include absenteeism from adhering to close contact isolation protocols. As a rule of thumb, for every positive case identified at site approximately two coworkers were sent home to isolate for a minimum of seven days. In addition, many of our team also needed to take time off to care for sick children and family members, as COVID cases spiked in surrounding communities. Fortunately, due to our very high vaccination status, the severity of any positive cases has remained low. As of today, eight of our 12 managed operations have a fully vaccinated workforce of employee and contractors, positioning us to emerge strongly on the other side of this wave and others that may come. However, as a consequence of managing through the Omicron surge, our operations have been impacted during the first quarter by lower productivity from close contact isolation protocols, supply capacity constraints and various other safety measures. We've also experienced pandemic-related supply chain disruptions and the impacts from various state and national border restrictions. This has affected both labor availability and the delivery of equipment and critical spares. And although, our operations were not directly impacted by the Russian invasion of Ukraine, it has resulted in new and developing complexities, global supply chains and the input costs. As we described in our guidance webcast last December, we assured that escalation factor in 2022, when we developed our business plan to account for higher inflation expected during this year. During the first quarter, we remain in line with our inflation assumptions, but we are closely monitoring critical commodities and materials such as natural gas and the ammonia used for the production of explosives and cyanide. Although, difficult to predict at this stage, the cost pressures from these new supply chain disruptions may increase our unit cost by another 3% to 5% and toward the high end of our guidance range. We will be closely monitoring [Indiscernible] the second quarter and we'll provide you with an update during our Q2 earnings call in July. On the production front, we are well positioned to land within our guidance, now tracking to land 100,000 ounces below our mid-point for gold. We continue to expect both production and unit cost to improve through the second half with approximately 53% of our production weighted to the back half of the year, driven by Tanami, Ahafo, Cerro Negro and our Canadian operations. And as we have demonstrated since the start of the pandemic, we will continue to be transparent as we can with our updates to the market as we leverage our proven operating model and balanced global portfolio to overcome these mid-term uncontrollable disruptions and deliver on our long-term commitments. At Newmont, we have created a robust and diverse portfolio of operations along with a pipeline of more than 20 organic projects with the scale and mine life to deliver long-term results. Newmont will produce more than 6 million ounces of gold each year and almost 2 million gold equivalent ounces from copper, silver, lead and zinc, combined that is nearly 8 million gold equivalent ounces per year for at least the next decade, the most of any company in our industry. And it is important to note that this is attributable production, among our 12 operating mines and two joint ventures, nearly 90% of this attributable gold production comes from top tier jurisdictions. And with the acquisition of the remaining 5% ownership in Yanacocha is 11 of our 12 managed operations will be 100% owned, ensuring that our stakeholders receive the full benefit from Newmont's clear strategic focus and superior execution. We firmly believe that where we choose to invest and operate matters. We have a disciplined geopolitical risk program that ensures we routinely assess our jurisdictions and our risk tolerance to deliver long-term results from established mining jurisdictions. Underpinning our portfolio is a robust foundation of reserves and resources, which combined with the gold industry's best organic project pipeline provides the pathway to steady production and cash flow well into the 2040s. We are entering a period of meaningful reinvestments as we continue to advance our near-term projects, including the second expansion at Tanami in Australia's Northern Territory, the development of Ahafo mill in Ghana and the Yanacocha Sulfides project, and next exciting chapter in Newmont’s long and profitable history in Peru. And with that, I'll turn it over to Rob and then Nancy for a more detailed look at our first quarter performance. Over to you, Rob. Rob Atkinson: Thank you, Tom, and good morning, everyone. Turning to the next slide. Let's dive into the operations and projects starting with Africa. Tom and I had the opportunity to separately visit Ghana recently and we were impressed with the progress of both operations as they continued to advance important growth opportunities in this proven mining industry, including sublevel shrinkage at Subika underground, the Akyem Mine and of course, Ahafo North as indicated during our fourth quarter earnings call, Ahafo South saw the challenging start of the year. Besides first quarter performance was impacted by supply chain disruptions and global border closures, impacting labor availability and the delivery of new equipment and critical spares. As an example, last year, the site ordered four new drills for the underground and open pit operations. And we only received the first drill in March this year with delivery of the remaining drills expected sometime in the third quarter, much later in an originally planned. In addition to delay of replacement parts for existing drills, as compounding the situation, creating availability challenges with the equipment that we have on hand today, improve no performance has helped to offset these delays but the impacts from the pandemic have affected our ability to ramp up mining rates in the Subika underground. And as a consequence, we are evaluating rates to improve our mining rates, which may include adding a third production level to access higher rates in late 2022 and into 2023. And we expect to have an update with our quarter two earnings in July. Our team delivered a solid performance in the first quarter due to sustained throughput and strong recoveries. The team continues to progress stripping of the next lay back in the open pit, which will extend mine life by an additional four years and provide future optionality for both underground and open pit growth. And finally, we continue the development of the Ahafo North project, engineering is nearly 90% complete and procurement is 60% complete as we continue to work together with local communities, traditional leaders and regulators to give full land access and convince construction. And just in the last few weeks, Tom and I met separately with key stakeholders and received strong support for this important project. And last week, we also achieved an important milestone with the cabinet in Ghana, formally approving the divestiture of the highway that currently passes through a section of the new mine site. When operations begin, Ahafo North is expected to add approximately 300,000 ounces of gold per year while creating lasting value for host communities through enhanced local sourcing and hiring as we develop this political body. And now turning into Australia, at Boddington and Tanami, we experienced the impact from the Omicron surge in the first quarter as labor availability and close contact isolation protocols impacted the region. In addition, the West Australian border was reopened in early March, leading to an increase in on-site cases, but also allowing our teams, contractors and business partners to move more freely through the country and to Tanami for the first time in many months. At Boddington, we reported lower production compared to the fourth quarter due to plant maintenance and COVID-related absenteeism as we saw our first COVID cases on the site. These impacts were partially offset by improved grades and higher ore tonnes mining from Boddington’s fleet at fully autonomous trucks. The team is diligently working multiple face positions in the circuit to access higher grade ore and we expect tonnes mined in grade to remain strong throughout the year. As we continue to optimize consistency, efficiency and productivity from our autonomous truck fleet, a key component to delivering a strong finish to the year. At Tanami the site delivered a strong performance despite the impacts from the Omicron surge in the first quarter and a very competitive labor market in Australia. The site also delivered lower ore grade than the fourth quarter due to mine sequencing and unplanned maintenance at processing facilities. The team continues to progress the second expansion at Tanami, a project with potential to extend mine life beyond 2040. As you can see here in the photo, the assembly of the head frame is nearing completion, which is an important milestone as we transition from the reaming of the shaft to commencing the shaft lining activities. Nearly 85% of the project engineering and procurement has been completed. And over the coming months, the site will focus on the completion of the head frame installation and commencement of the shaft lining, bringing Tanami that much closer to delivering significant ounce, cost and efficiency improvements. And now over to North America, Peñasquito delivered another solid quarter, a strong mill performance that delivered higher co-product production from lead and zinc offset lower gold production. Stripping has continued in both Peñasquito and Chile Colorado pit with lower gold grade and higher ore coming from Chile Colorado in the first quarter. And looking ahead, due to efficient sequencing gold production from this large polymetallic mine is expected to decrease in the second quarter, but increase in the third quarter due to higher grade delivered from the Peñasquito mine. Moving to Canada, our operations in the country as a whole continued to be impacted by ongoing challenges, standing from the global pandemic and a very competitive labor market. As indicated a couple of months ago, the Omicron surge reintroduced flight capacity constraints, testing requirements, and strict close contact isolation protocols. And working closely with the First Nations, we have maintained our stringent protocols and testing regimes, even as restrictions have relaxed. Due to the remote locations, these impacts were particularly pronounced at Musselwhite and Éléonore where both sites delivered lower tonnes mined and process compared to the fourth quarter. As an example, we saw absenteeism rates as high as 15% to 20% during the peak of the Omicron surge in our Canadian operations. And at Musselwhite, we decided to place the site and care maintenance for seven days in February to reduce the spread of the virus and protect the health of our workforce and communities. At Porcupine, our ore grade was offset by lower tonnes processed as a result of COVID-related labor absenteeism and mill maintenance. In addition to challenging ground conditions and some ventilation constraints at Hoyle Pond, the site continues to progress the Pamour layback, a project that will extend mining at Porcupine through 2035. Construction for water treatment plant is well underway. The team prepares to dewater the pit in advance towards full funds approval in the second half of this year. And finally, at CC&V a mine required a mill shutdown from a conveyor fire that occurred during the first quarter. With the pending conclusion of our contract to supply concentrate from CC&V to Nevada Gold Mines, we are stepping back to assess our operating strategy at the site to determine if there is the potential for a simpler, higher value, longer life rich only operation that does not carry the complexity and cost of running a mill to process a relatively small amount of ore mine. This work is underway and we expect to have an update with our quarter two earnings in July. Coming to South America. Merian delivered a solid performance despite a very heavy rain and mill maintenance during the first quarter, as the site continues to utilize an ore binding strategy to balance steady grade and strong mill performance. In Yanacocha, record rains resulted in a federal emergency declaration of Peru impacting the site as it continues to deliver leach only production, while we’ve worked to develop the first phase of the Sulfides project, which continues to advance towards an investment decision in late 2022. Engineering is approximately 50% complete and the early earthworks and construction activities continue to progress at site. And once finished the camp will allow the construction workforce to begin ramping up in 2023. And finally, Cerro Negro delivered a strong performance in the first quarter as a result of higher grade mine from Marianas North and Marianas Central and ongoing improvements for productivity, despite disruptions from the Omicron surge. During the first quarter, the team successfully completed the tailings storage facility expansion project, and they continued to progress the first wave of expansions at Cerro Negro, including the development of the Marianas and Eastern districts to extend existing operations beyond 2030. The team is advancing the development of the San Marcos decline. And as you can see in the quarter, the construction of the roads, infrastructure platforms and portal access are all well underway in the Eastern district. And with that, I’ll turn it over to Nancy on the next slide. Nancy Buese: Thanks, Rob. Let’s start with a look at the financial highlights. In the first quarter, Newmont delivered $3 billion in revenue at a real life gold price of $1,892 per ounce, adjusted net income of $546 million or $0.69 per diluted share. Adjusted EBITDA of $1.4 billion and solid free cash flow of $252 million, which includes unfavorable working capital movements of $465 million in the first quarter, primarily driven by timing of cash collections and over $420 million of tax payments, largely attributable to 2021. Free cash flow was also impacted by higher capital spend, as Newmont enters a period of significant reinvestment and essential component in growing production, improving margins and extending mine life. First quarter GAAP net income from continuing operation was $432 million or $0.54 per share. Adjustments included $0.16 related to a non-cash loss on a pension annuitization settlement, $0.04 primarily related to a loss from the sale of La Zanja as part of the transaction to increase our ownership at Yanacocha. $0.05 related to the unrealized mark to market gains on equity investments, $0.04 related to tax adjustments and evaluation allowance, and $0.04 of other charges. Taking these adjustments into account, we reported first quarter adjusted net income of $0.69 per diluted share. In our balanced global portfolio combined with our discipline provides significant leverage to higher gold prices from the largest production base in the world. For every $100 increase in gold prices above our base assumption, Newmont delivers $400 million of incremental attributable free cash flow per year. And Newmont is the only company in the gold mining industry with the ability to generate these levels of attributable free cash flow, allowing us to confidently execute our capital allocation priorities and build from our position as the world’s leading gold company. A year and a half ago, Newmont was the first in the gold industry to announce a clear dividend framework with a decisive strategy to provide stable and predictable returns. Yesterday, we declared first quarter dividend of $0.55 per share, or $2.20 per share on an annualized basis, calibrated at an $1,800 gold price assumption and a conservative 40% distribution at incremental free cash. We continue to review our dividend each quarter with our board assessing gold price perform along with our operational and financial outlook over the long-term to determine the payout levels within our dividend framework. Since its introduction 18 months ago, Newmont has returned $2.5 billion to shareholders from dividends, demonstrating our confidence in the long-term value of our business and our ability to maintain financial flexibility, while steadily reinvesting in our future. Our capital allocation priorities remain unchanged with a clear strategy to reinvest in our business through exploration and organic growth projects, to maintain financial strength and flexibility on our balance sheets and to continue to provide industry leading returns to shareholders. In the first quarter, we delivered on each of these priorities by progressing our profitable reinvestment into the business with the advancement of our near-term projects and an ongoing commitment to our robust exploration strategies, enhancing our ownership of world class asset and improving mining jurisdictions through the acquisition of the remaining interest in Yanacocha and the Sulfides project, maintaining our industry leading dividend of $2.20 per share on an annualized basis and sustaining a strong balance sheet with $7.3 billion in liquidity and a net debt to EBITDA ratio of 0.3x, preserving Newmont’s financial flexibility across price cycles. As we look ahead, we are confident in our ability to deliver on our disciplined capital allocation priorities, creating long-term value for the business and maintaining our position as the world’s leading gold company. With that, I’ll hand it back to Tom on Slide 20. Tom Palmer: Thanks, Nancy. Newmont have a long history of leading change in our approach to ESG and these practices have been embedded in our culture and strategy and are woven into the very fabric of our company. Last week, Newmont launched its 2021 annual sustainability report. Part of the suite of reports and our company’s ESG practices in the key areas that matter most to our stakeholders, including health, safety and security, human rights, the environment, social acceptance, governance and inclusion and diversity. Some of the highlights from this year’s report include zero work-related fatalities for a third year in a row with our focus on verifying the critical controls that prevent fatalities and coaching frontline leaders to provide visible self leadership. Continuing to put the health, safety and wellbeing of our workforce and host communities at the heart of every decision we made and continue to make during this pandemic. A key part of this was adopting the requirement for all of our workforce to be fully vaccinated. With contributions to our Global Community Support Fund, we supported COVID testing facilities, vaccine awareness campaigns and vaccine rollouts in areas near our operations. We established the industry first sustainability linked bond, a bond that holds Newmont to account for meeting our 2030 initial reduction targets, and also to reach gender equality and see leadership bonds by 2030. By linking the interest rate paid to our ESG performance, this represents the next important step in aligning our financial performance with our sustainability performance. And finally, Newmont played an important role in creating economic value, contributing $10.8 billion to our workforce, host communities and jurisdictions through wages of benefits, operating costs, capital spend, royalties and taxes. Next month, we will launch our second annual climate report, which will outline Newmont’s climate related risks and opportunities, our strategic planning and the pathways we are taking to achieve our climate targets. We’ve been disclosing a non-financial performance since 2004, regularly ranking is one of the most transparent companies in the S&P 500 and positioning Newmont as the gold sectors recognized sustainability leader. We understand the strong ESG performance is an indicator of a world run organization, and we will only be successful if we forge and maintain strong partnerships with local communities and demonstrate our ability to mine and matter that protects the environment and creates opportunities for people. In order to address the critical global issues we face today, the mining industry will need leaders to scale mine life, superior cash flow generation, and an unwavering commitment for leading ESG practices. And we believe that Newmont is one of those leaders. We will continue to differentiate ourselves through our clear strategic focus and discipline our unmatched global portfolio of operations and projects and an integrated operating model with a deep edge of experienced leaders. As we continue in our next 100 years of sustainable and responsible mining. And with that, I’ll turn it over to the operator to open the line for questions. Operator: Thank you. [Operator Instructions] Our first question comes from Jackie Przybylowski with BMO Capital Markets. Jackie, your line is now open. Operator: Thank you, Jackie. Our next question comes from Josh Wolfson with RBC Capital Markets. Josh, your line is now open. Operator: Thank you, Josh. Our next question comes from Tanya Jakusconek with Scotiabank. Tanya, your line is now open. Operator: Thank you, Tanya. Our next question comes from Lawson Winder with Bank of America. Lawson your line is now open. Operator: Thank you, Lawson. Our next question comes from Greg Barnes with TD Securities. Greg, your line is now open. Operator: Thank you, Greg. Our next question comes from – go ahead. Operator: Understood. Thank you. Our next question comes from Fahad Tariq of Credit Suisse. Fahad, your line is now open. Operator: Our next question comes from Anita Soni with CIBC World Markets. Anita, your line is now open. Operator: Thank you, Anita. Our next question comes from Adam Josephson with KeyBanc. Adam, your line is now open. Operator: Thank you, Adam. Our next question comes from Mike Parkin with National Bank. Mike, your line is now open. Operator: Thank you, Mike. Our next question comes from Cleve Rueckert with UBS. Cleve, your line is now open. Operator: Thank you, Cleve. Our next question comes from Michael Dudas with Vertical Research. Michael, your line is now open. Operator: Thank you, Michael. Our next question comes from Brian MacArthur with Raymond James. Brian, your line is now open. Operator: Thank you, Brian. Our next question comes from Tanya Jakusconek with Scotiabank. Tanya, your line is now open. Operator: Thank you, Tanya. There are currently no further questions in queue. [Operator Instructions] Tom Palmer: I think we might be good to finish up, operator by the looks of it. Operator: Let's see. Okay. If you would like to close out the Q&A session, we can do that, one moment. This concludes the Q&A answer session. I would now like to turn the conference back over to Tom Palmer for closing remarks. Tom Palmer: Thank you, operator and thank you everyone for taking the extra time to work through our call with us today, and please have a lovely weekend. And I look forward to catching up with you on our analyst roundtable in a couple of week’s time. Thanks, everyone. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Newmont Corporation's Upcoming Earnings and Financial Challenges
Newmont Corporation, trading as NYSE:NEM, is a leading gold mining company with operations worldwide. It is known for its extensive portfolio of gold and copper assets. As a major player in the mining industry, Newmont competes with other giants like Barrick Gold and AngloGold Ashanti. The company is set to release its quarterly earnings on February 20, 2025, with analysts estimating an earnings per share (EPS) of $1.11 and projected revenue of $5.3 billion.
Despite these projections, Newmont faces challenges, including a class action lawsuit alleging securities fraud. The lawsuit, filed by Levi & Korsinsky, LLP, and supported by Rosen Law Firm, targets losses incurred by shareholders between February 22, 2024, and October 23, 2024. The complaint points to disappointing EBITDA results, decreased production, and increased operating costs, which were disclosed on October 23, 2024.
The company has a price-to-sales ratio is 3.21, suggesting investors are paying $3.21 for every dollar of sales. The enterprise value to sales ratio is 3.57, showing the company's total valuation relative to its sales. The company maintains a moderate debt-to-equity ratio of 0.31, indicating a balanced approach to leveraging debt. Additionally, Newmont's current ratio of 1.96 suggests a strong ability to cover short-term liabilities with short-term assets, providing some financial stability amidst ongoing challenges.
Newmont Corporation's Upcoming Earnings and Financial Challenges
Newmont Corporation, trading as NYSE:NEM, is a leading gold mining company with operations worldwide. It is known for its extensive portfolio of gold and copper assets. As a major player in the mining industry, Newmont competes with other giants like Barrick Gold and AngloGold Ashanti. The company is set to release its quarterly earnings on February 20, 2025, with analysts estimating an earnings per share (EPS) of $1.11 and projected revenue of $5.3 billion.
Despite these projections, Newmont faces challenges, including a class action lawsuit alleging securities fraud. The lawsuit, filed by Levi & Korsinsky, LLP, and supported by Rosen Law Firm, targets losses incurred by shareholders between February 22, 2024, and October 23, 2024. The complaint points to disappointing EBITDA results, decreased production, and increased operating costs, which were disclosed on October 23, 2024.
The company has a price-to-sales ratio is 3.21, suggesting investors are paying $3.21 for every dollar of sales. The enterprise value to sales ratio is 3.57, showing the company's total valuation relative to its sales. The company maintains a moderate debt-to-equity ratio of 0.31, indicating a balanced approach to leveraging debt. Additionally, Newmont's current ratio of 1.96 suggests a strong ability to cover short-term liabilities with short-term assets, providing some financial stability amidst ongoing challenges.
Newmont Corporation's (NYSE:NEM) Impressive Quarter Earnings
- Earnings Per Share (EPS) of $0.72, surpassing the anticipated $0.617, indicating strong operational efficiency.
- Revenue of $4.4 billion, exceeding forecasts and showcasing significant growth from the previous year.
- Financial ratios such as the debt-to-equity (D/E) ratio of 0.31 and current ratio of 2.15 highlight a solid financial structure and short-term health.
Newmont Corporation (NYSE:NEM), a leading entity in the gold and copper mining industry, recently disclosed its earnings for the quarter, revealing figures that not only highlight its financial health but also its ability to exceed market expectations. On July 24, 2024, NEM reported an earnings per share (EPS) of $0.72, surpassing the anticipated $0.617, and a revenue of $4.4 billion, which exceeded the forecasted $4.13 billion. This performance underscores the company's robust operational efficiency and market position, especially when considering the competitive landscape of the mining sector.
The reported EPS of $0.72, which outdid the Zacks Consensus Estimate of $0.53 per share, represents a significant leap from the $0.33 per share earned a year ago. This 35.85% earnings surprise continues a trend for Newmont, following a previous quarter where earnings of $0.55 per share beat forecasts by 57.14%. Such consistent outperformance in earnings highlights Newmont's strategic planning and execution capabilities, positioning it favorably among investors and stakeholders.
Revenue growth is another area where NEM shines, with the reported $4.4 billion for the quarter ending June 2024 not only surpassing the Zacks Consensus Estimate by 26.24% but also marking a substantial increase from the $2.68 billion recorded in the same period last year. This growth trajectory is indicative of Newmont's expanding operations and its ability to capitalize on market opportunities, further solidifying its standing in the mining sector.
Financial ratios provide deeper insights into Newmont's valuation and financial health. Despite a negative price-to-earnings (P/E) ratio of approximately -20.62, suggesting market skepticism, the company's price-to-sales (P/S) ratio of about 4.20 and an enterprise value to sales (EV/Sales) ratio of roughly 4.74 reflect a valuation that investors are willing to pay for its sales. Moreover, the enterprise value to operating cash flow (EV/OCF) ratio of around 20.32 offers a perspective on the company's valuation concerning its operating cash flow, indicating a positive outlook from the cash flow perspective.
The debt-to-equity (D/E) ratio of 0.31 portrays a moderate level of debt, suggesting a balanced financial structure, while the current ratio of about 2.15 indicates strong short-term financial health. These metrics, combined with Newmont's impressive earnings and revenue performance, paint a picture of a company that is not only navigating the complexities of the mining industry successfully but is also laying down a solid foundation for sustained growth and profitability.
Newmont Corporation's (NYSE:NEM) Impressive Quarter Earnings
- Earnings Per Share (EPS) of $0.72, surpassing the anticipated $0.617, indicating strong operational efficiency.
- Revenue of $4.4 billion, exceeding forecasts and showcasing significant growth from the previous year.
- Financial ratios such as the debt-to-equity (D/E) ratio of 0.31 and current ratio of 2.15 highlight a solid financial structure and short-term health.
Newmont Corporation (NYSE:NEM), a leading entity in the gold and copper mining industry, recently disclosed its earnings for the quarter, revealing figures that not only highlight its financial health but also its ability to exceed market expectations. On July 24, 2024, NEM reported an earnings per share (EPS) of $0.72, surpassing the anticipated $0.617, and a revenue of $4.4 billion, which exceeded the forecasted $4.13 billion. This performance underscores the company's robust operational efficiency and market position, especially when considering the competitive landscape of the mining sector.
The reported EPS of $0.72, which outdid the Zacks Consensus Estimate of $0.53 per share, represents a significant leap from the $0.33 per share earned a year ago. This 35.85% earnings surprise continues a trend for Newmont, following a previous quarter where earnings of $0.55 per share beat forecasts by 57.14%. Such consistent outperformance in earnings highlights Newmont's strategic planning and execution capabilities, positioning it favorably among investors and stakeholders.
Revenue growth is another area where NEM shines, with the reported $4.4 billion for the quarter ending June 2024 not only surpassing the Zacks Consensus Estimate by 26.24% but also marking a substantial increase from the $2.68 billion recorded in the same period last year. This growth trajectory is indicative of Newmont's expanding operations and its ability to capitalize on market opportunities, further solidifying its standing in the mining sector.
Financial ratios provide deeper insights into Newmont's valuation and financial health. Despite a negative price-to-earnings (P/E) ratio of approximately -20.62, suggesting market skepticism, the company's price-to-sales (P/S) ratio of about 4.20 and an enterprise value to sales (EV/Sales) ratio of roughly 4.74 reflect a valuation that investors are willing to pay for its sales. Moreover, the enterprise value to operating cash flow (EV/OCF) ratio of around 20.32 offers a perspective on the company's valuation concerning its operating cash flow, indicating a positive outlook from the cash flow perspective.
The debt-to-equity (D/E) ratio of 0.31 portrays a moderate level of debt, suggesting a balanced financial structure, while the current ratio of about 2.15 indicates strong short-term financial health. These metrics, combined with Newmont's impressive earnings and revenue performance, paint a picture of a company that is not only navigating the complexities of the mining industry successfully but is also laying down a solid foundation for sustained growth and profitability.
Newmont Corporation Shares Plunge 13% Following Q2 Miss
Newmont Corporation (NYSE:NEM) shares plummeted around 13% on Monday following the company’s reported Q2 results, with EPS of $0.46 coming in worse than the Street estimate of $0.68, impacted by higher operating costs, provisional pricing headwinds, and Penasquito profit sharing expenses. Revenue was $3.06 billion, compared to the Street estimate of $3.15 billion.
The company's free cash flow outlook has materially weakened over 2022-2024 as compared to prior expectations, and financial flexibility is now viewed as below average.
The analysts at RBC Capital believe it is reasonable to expect the company’s dividend policy to change later in 2022 to allow for greater latitude at current/lower gold prices. The analysts lowered their price target to $60 from $77, while reiterating their Sector Perform rating.
