Newmont Mining’s Q4 2016 Earnings Review: Higher Gold Prices And Shipments Drive Earnings Improvement
Newmont Mining reported a significant improvement in its fourth quarter earnings, driven by higher gold prices and shipment volumes. Gold prices averaged higher in the fourth quarter of 2016 as compared to the corresponding period of the previous year driven by a rally in prices in the third quarter in the wake of the UK’s June 23 EU referendum. Though prices cooled off in the fourth quarter in anticipation of the Fed’s December rate hike, they remained comfortably higher than levels seen in Q4 2015. In addition, Newmont reported a sharp increase in gold production as a result of the ramp up of production from the company’s new Long Canyon and Merian mines. The company’s ongoing cost reduction initiatives, driven by automation and analytics, helped deliver improved cost performance, which helped prop up earnings. [1]
Going forward, the company management reaffirmed its commitment to disciplined capital allocation by focusing on a portfolio of low-cost growth projects. The company divested a number of high-cost mining assets over the past years which helped lower operating costs. In addition, the company continued to focus on debt management. [1] Given the downside risks to gold prices from the Fed’s rate hike cycle, a strong balance sheet will stand the company in good stead going forward. [2]
Have more questions about Newmont Mining? See the links below.
- What Is Newmont Mining’s Revenue And EBITDA Breakdown?
- What Is Newmont Mining’s Fundamental Value Based On Expected 2015 Results?
- How Has Newmont Mining’s Revenue Composition Changed Over The Last 5 Years?
- By What Percentage Did Newmont Mining’s Revenue & EBITDA Decline In The Last 5 Years?
- By What Percentage Can Newmont Mining’s Revenue & EBITDA Grow In The Next 3 Years?
- How Will Newmont Mining’s Revenue Composition Change by 2020?
- Newmont Mining: A Look Back At The Year 2015
- Why The Commencement Of Production At The Merian Mine Will Boost The Fortunes Of Newmont’s South American Gold Mining Operations
Notes:
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Notes:
- Newmont Mining’s Q4 2016 Earnings Call Transcript, Seeking Alpha [↩] [↩]
- Fed minutes show support for rate hike ‘fairly soon’, Marketwatch [↩]