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Newmont (NYSE:NEM) reported second-quarter earnings before the bell Monday, posting a profit of $0.46 per share, $0.22 worse than the analyst estimate of $0.68. Revenue for the quarter came in at $3.06 billion versus the consensus estimate of $3.15 billion.
Newmont shares have plunged over 13% following the report. Meanwhile, analysts at UBS, RBC Capital, KeyBanc, and Credit Suisse all released research notes reacting to the release:
A UBS analyst who has a Neutral rating and $78 per share price target on Newmont, said “revenues of $3.06b were slightly above consensus’ $3.05b. Adj. EBITDA of $1.15b was 17% below consensus’ $1.38b. Adj. EPS of $0.46/sh was also below consensus’ $0.64/sh.”
“Q2 attributable gold production was 1.50m oz, slightly above consensus’ 1.49m oz. NEM’s realized gold price was $1,836/oz vs. consensus’ $1,884/oz (mgmt identified a $225m negative mark to market adjustment on provisionally priced sales). The earnings miss came primarily on costs, as CAS/oz (costs attributable to sales; ie: cash costs) of $932 were 8% above consensus’ $860 and up 4.7% q/q,” added the analyst.
An RBC Capital Markets analyst who has a Sector Perform and $77 per share price target on the stock, stated: “NEM reported 2Q results that were largely weaker than our and consensus estimates, the company reduced its annual guidance, and provided incremental details on its project portfolio that incorporate inflation and timeline delays. We expect shares to trade lower vs. peers, and forecast downside to consensus 2022 estimates and beyond.”
An analyst at KeyBanc Capital Markets said in his note that the company’s EPS was “well below the recently-reduced consensus estimate of $0.66 (we were at $0.68).”
“Consensus estimates had been cut substantially in recent weeks owing to falling commodity prices and rising costs, but the cuts were clearly not enough. The company’s 2Q attributable gold production was 1.495 million ounces, ~3% above consensus of 1.452 million ounces, and its sales were slightly above consensus. However, its costs were far higher than consensus expected,” added the analyst.
Finally, a Credit Suisse analyst, who has a Neutral rating and $70 price target on Newmont, stated the company’s EPS was a “meaningful miss,” and they expected a “negative stock reaction today on the Q2 miss and weaker guide.”
“As we expected, Newmont increased its annual cost guidance to reflect labour inflation (Australia and Canada were previously described as being very tight mining labour markets),” wrote the analyst.
