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Newmont Goldcorp reports 57% rise in revenue on higher gold prices, production in third quarter

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(Kitco News) - Higher gold prices helped boost Newmont Goldcorp’s revenues up by 57% in the third quarter but it still wasn’t strong enough to meet earnings expectations, according to the company’s latest earnings report.

Tuesday morning, ahead of the North American Open, the world’s largest gold mining company said that its adjusted net income was $292 million or $0.36 per diluted share, up compared to $175 million or $0.33 per diluted share in the prior year quarter. However, the earnings number was a slight miss as consensus estimates among market analysts expected income of $0.39 per share.

Despite the consensus miss, the company reported strong revenues, higher production and increased cash flow.

Tom Palmer, President and Chief Executive Officer, said in a press release that the company’s third quarter results demonstrates its building strong momentum to finish the year on a strong note.

“We expect to deliver $240 million in annual run-rate improvements by the end of 2019 and exceed our initial synergy targets from the Goldcorp acquisition. We also continued to strengthen our portfolio and advance profitable growth by bringing on Borden, the Ahafo Mill Expansion and Quecher Main on time and within budget,” he said.

Looking at production, the company said that attributable gold production increased 28% to 1.64 million ounces for the quarter. The jump in production was primarily due to new production from the Goldcorp assets and higher grades at Ahafo, Newmont said.

Higher production and an average realized gold price of $1,476 an ounce, helped the company generate $2.713 billion in revenues for the third quarter. Along with higher revenue, Newmont said that consolidated cash flow from continuing operations totaled $793 million and free cash flow rose to $365 million, an increase of 85% and 137% over the prior year quarter, respectively.

Although Newmont reported strong earnings, the company also noted increased costs. The company said that gold costs applicable to sales came in at $733 per ounce, up 6% over the third quarter of 2018. At the same time all-in sustaining costs came in at $987 per ounce, up 10% from last year.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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