What to Expect From Newmont Mining’s Fourth Quarter Results

by Trefis Team
Newmont Goldcorp Corporation
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Newmont Mining (NYSE: NEM) will release its 4th quarter & full year 2017 results on Feb 22 and conduct a conference call with analysts the same day. Our key expectations from the company’s 4th quarter results are highlighted in the below graph and are further elaborated in our interactive platform. We expect the company to display considerable Y-o-Y growth in both its revenue and EPS driven by higher realized gold and copper prices and lower costs.The company’s shipment volume in Q4 is expected to display a marginal growth per the production guidance released by the company. However, realized prices for gold are expected to display a Y-o-Y growth of ~7% in Q4. This should help boost the company’s topline. Gold prices in the last quarter of 2017 gained strength with a falling dollar index and a rising uncertainty regarding the U.S. national debt with the execution of the latest tax reform law.

The company should display marginal improvement in its cost saving as measured by its all-in sustaining costs (AISC) and cost applicable to sales. The company expects full-year 2017 AISC to range between $900 to $950 per ounce of gold in contrast to an AISC of $912 per ounce realized in 2016. The AISC is a comprehensive metric which captures all costs (production costs as well as sustaining capital expenses) required to sustain ongoing mining operations. Cost applicable to sales are expected to be rangebound between $675 to $715 per ounce of gold in comparison to $682 per ounce realized in 2016. The company has been systematically investing in mines in order to lower its AISC in order to operate profitably even in an environment of a commodity downturn.

With costs in check, a more favorable gold pricing environment should enable Newmont Mining to report improved results in the upcoming quarters.

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