Newmont Mining Ends In Red Despite Beating Market Estimates

by Trefis Team
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Newmont Goldcorp Corporation
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Newmont Mining (NYSE: NEM) released its Q4 & full-year 2017 results on 22 Feb and surprised the market by beating both consensus revenue & EPS (non-GAAP) estimates. However, the subsequent impact of the latest U.S. tax reform has resulted in the company to write-down its net deferred tax asset in its latest quarter, leading the company to report a net loss of $534 million in Q4 2017. Thus Newmont’s stock fell by greater than 1% despite beating consensus market estimates. The key highlights of the company’s financial performance has been summarized in the below graph.

An 8% rise in the company’s year-on-year (Y-o-Y) revenue in Q4 2017 was largely driven by the rise in the prices of gold and copper, as shipment volumes displayed a marginal increase. 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. Similarly, a falling dollar index and China’s structural change had supported higher copper prices throughout 2017.

Operationally, both costs applicable to sales (CAS) & all-in sustaining costs (AISC) were higher in Q4 2017 when compared to the same period last year. However, EPS (Non-GAAP) displayed exceptional Y-o-Y growth as prior year results were significantly impacted by impairment charges reported at the company’s Yanacocha mines.

Looking forward, Newmont expects its costs to rise slightly in 2018 due to higher stripping at certain locations. Costs will display signs of decline from 2019 onward with the onset of its new lower cost production at Subika Underground along with its accessibility to higher grade ores. The company expects its production volume and cost level to be the strongest in the second half of the year.

We have summarized the key takeaways from the company’s fourth-quarter results in our interactive dashboard.

Have more questions about Newmont Mining? See the links below.

 

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