(Kitco News) - Despite ongoing headwinds, the world's largest gold producer reported stronger-than-expected third-quarter earnings Thursday, as higher gold sales volumes and elevated metal prices helped boost profitability and cash flow.
Thursday after the North American equity close, Newmont Corporation (NYSE: NEM) reported adjusted net income of $2.20 per diluted share for the third quarter of 2026, beating analysts' consensus estimate of $1.94 per share by $0.26, or 13.4%.
The results also exceeded the high end of analysts' earnings estimates, which ranged from $1.78 to $2.19 per share. Adjusted earnings increased 28.7% compared with $1.71 per share reported in the same quarter last year.
Newmont reported adjusted net income of $2.5 billion, while net income attributable to shareholders totaled $2.8 billion, or $2.57 per diluted share.
The company said its strong financial performance was supported by higher gold sales volumes and higher realized copper prices, although gold prices declined compared with the previous quarter.
Newmont's operational performance also improved during the quarter, with attributable gold production increasing 7% from the previous quarter to 1.30 million ounces. The increase was driven by higher production at Cadia following its recovery from a seismic event, along with stronger output at Boddington and Peñasquito.
The company reported an average realized gold price of $4,317 per ounce, down $97 from the second quarter. Despite the decline, elevated gold prices continued to support strong operating margins.
Gold all-in sustaining costs (AISC) fell 2% from the previous quarter to $1,545 per ounce, while gold costs applicable to sales declined 10% to $925 per ounce.
Newmont generated $2.8 billion in cash from operating activities, although free cash flow declined to $1.9 billion, reflecting working capital pressures and increased capital investment.
Looking ahead, Newmont maintained its full-year gold production guidance of approximately 5.9 million attributable ounces and improved its cost outlook, lowering its gold AISC guidance to $1,520 per ounce from $1,590 previously. Its gold costs applicable to sales guidance was also reduced to $925 per ounce from $950.
The company expects the fourth quarter to be its strongest production period of the year, supported by higher-grade ore at several operations. However, management warned that rising oil prices, inflationary pressures and lower by-product production could push unit costs higher toward year-end.
"Newmont remains on track to achieve our full-year 2026 production guidance and improved full-year cost outlook, supported by disciplined operational execution in the third quarter," said Natascha Viljoen, Newmont's president and chief executive officer.
"We produced approximately 1.3 million attributable gold ounces, and generated $1.9 billion of free cash flow," she added.
Newmont also highlighted its strong balance sheet, ending the quarter with $8.8 billion in cash and $12.8 billion in total liquidity, including a net cash position of $3.2 billion.
The company returned approximately $1.5 billion to shareholders through dividends and share repurchases since its previous earnings announcement. It also declared a quarterly dividend of $0.26 per share.
On the development front, Newmont said construction of the shaft at its Tanami Expansion 2 project was completed ahead of schedule, with commercial production now expected in the first half of 2027.
Meanwhile, the company continues to advance its Red Chris Block Cave project in British Columbia, with a full-funds investment decision expected in early 2027.
