What To Expect From Newmont Mining’s Q1 2018 Results

by Trefis Team
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Newmont Mining (NYSE: NEM) will report its first-quarter results on 26 April and conduct a conference call with analysts the same day. Consensus estimates have an average adj- EPS estimate of $0.33 and average revenue estimate of $1.86 billion, reflecting 32% and 12% year-on-year (y-o-y) growth. The company is expected to benefit from higher gold prices, while gold production volume is expected to decline.

The company has guided towards an annual production volume of 5.15 million ounces of gold (assuming mid-point) which is roughly 3% lower than the company’s actual output in 2017. Furthermore, production volume is expected to be stronger in the second half of the year as the first half is expected to be negatively impacted by scheduled mine sequencing and plant maintenance shutdowns.

However, prevalent strong gold prices are expected to provide support to the company’s top line. Gold has been gaining strength due to the ongoing trade tension between the U.S. and China and the geopolitical tensions in the Middle East. Gold is considered as a safe-haven asset for investment and generally gains strength with increasing global uncertainty. A weaker dollar has further provided some buying opportunity for the yellow metal and aided its price.

Newmont expects its costs to be slightly higher in 2018, reflecting higher stripping at Carlin, Boddington, Ahafo, and Twin Creeks. However, the company’s bottom line is expected to benefit from lower interest expenses due to lower debt level and additionally from lower taxes from its North American operations as a consequent impact of the latest tax reform initiation by Pres. Trump. Thus, EPS is expected to be stronger in the current year.

We have created an interactive dashboard which outlines our key expectations for the company’s results for the current year. In case you have a different outlook, you can make changes to our key assumptions to arrive at your own fair price estimate for the company 

 

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