Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Can Newmont Survive Gold's Crash?

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Next Monday, Newmont Mining (NYSE: NEM  ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed kneejerk reaction to news that turns out to be exactly the wrong move.

Gold-mining companies had enough troubles keeping up with the price of gold bullion when the yellow metal was performing well. But with the recent swoon in gold prices, is Newmont doomed to further losses? Let's take an early look at what's been happening with Newmont Mining over the past quarter, and what we're likely to see in its quarterly report.

Stats on Newmont Mining



Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$2.39 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

How will Newmont Mining's earnings fare this quarter?
Analysts were already pessimistic about Newmont's earnings, even before gold's recent swoon, but their earnings-call cuts have gotten even more severe recently. Earnings-per-share estimates for the just-ended quarter are now $0.15 lower than they were three months ago, and analysts have cut more than $0.75 off their full-year 2013 earnings-per-share calls. The stock has followed those negative assessments downward, plunging more than 20% since mid-January.

We've already gotten a sense of what Newmont will announce next Monday, as it released preliminary operational figures earlier this week. The company saw first-quarter gold production fall nearly 11% from a year ago, to 1,165,000 ounces, although copper production rose close to 9%, to 38 million pounds.

But recent gold-price declines could have a huge impact on Newmont going forward. The company said it realized $1,631 per gold ounce during the quarter, so with the current price more than $200 per ounce below that, earnings could take a big hit in the second quarter if gold doesn't recover quickly. With investors fleeing from bullion ETFs SPDR Gold and iShares Silver Trust, it's clear that at least one source of investor appetite for precious metals and related stocks has taken a big hit.

Moreover, Newmont investors will suffer directly from gold-price declines due to dividend decreases. Just yesterday, Newmont cut its dividend by 18%, from $0.425 to $0.35, because of the drop in gold prices during the first quarter before the most recent decline. Even if gold stays at its current levels, Newmont's dividend could see another cut.

In Newmont's quarterly report, watch for the latest news from the company's Conga project in Peru. After long delays from controversies with protestors over potential environmental impacts of the mine, Newmont needs to come up with a viable strategy to develop Conga in order to avoid a catastrophic lost opportunity there.

Looking for more commodities-based ideas? Download the free report, The Tiny Gold Stock Digging Up Massive Profits. The Motley Fool's analysts have uncovered a little-known gold miner they believe is poised for greatness; find out which company it is, and why its future looks bright -- for free!

Click here to add Newmont Mining to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2386322, ~/Articles/ArticleHandler.aspx, 9/25/2016 7:03:50 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:01 PM
NEM $39.56 Down -1.21 -2.97%
Newmont Mining CAPS Rating: ***