(Kitco News) - Higher prices and improved cost management helped drive better-than-expected earnings for the world’s largest gold producer through the summer.
On Thursday, after the North American equity markets closed, Newmont Corporation (NYSE: NEM, ASX: NEM, PNGX: NEM) reported adjusted net income of $1.9 billion, or $1.71 per diluted share, and adjusted EBITDA of $3.3 billion.
Newmont’s adjusted earnings solidly beat expectations, as consensus estimates had called for an EPS of $1.44.
However, the senior gold producer is not faring well in the marketplace, with shares down more than 5% in premarket activity, last trading at $83.75 per share.
Although Newmont reported exceptional third-quarter earnings, the gains were driven mostly by higher prices, which were up 41% from the third quarter of last year.
The company reported an average realized gold price of $3,539 an ounce, up roughly $1,000 from the third quarter of 2024.
Looking at production, Newmont produced 1.42 million ounces of gold between July and September, down from 1.9 million ounces during the same period last year.
The company said production was impacted by lower gold grades and planned shutdowns at Peñasquito and Lihir, as well as the end of mining operations at the Subika open pit at Ahafo South in July.
Although production is down, the company has been able to keep costs in check. It reported all-in sustaining costs of $1,566 an ounce, down from $1,611 an ounce last year.
“Newmont delivered a robust third-quarter performance, producing approximately 1.4 million attributable gold ounces and generating a third-quarter record of $1.6 billion in free cash flow, marking the fourth consecutive quarter with over $1 billion in free cash flow," said Tom Palmer, Newmont's Chief Executive Officer. "We are making significant progress on the cost savings initiatives announced at the beginning of the year, enabling us to meaningfully improve our 2025 guidance for several cost metrics, while maintaining our outlook for production and unit costs in a rising gold price environment.
Newmont said the decrease was primarily due to lower G&A and other expenses, partially offset by higher sustaining capital spend.”
Although Newmont is not getting much love from the investment community, some analysts note that the senior gold producer has built a solid growth platform.
“We believe the company's operational leverage is clearly demonstrated by its fourth consecutive quarter of over $1B in free cash flow, reaching $1.6B (+107% Y/Y), while maintaining cost discipline with AISC declining 2.8% Y/Y to $1,566/oz. Management improved 2025 guidance for several cost metrics while maintaining production targets, reflecting benefits from cost savings initiatives,” said Matthew Miller, analyst at CFRA Research.
Miller said he is maintaining a strong buy recommendation for Newmont.
