Newmont Mining Corp. (NEM), the world’s second-largest gold producer, reported earnings that exceeded analysts’ estimates after costs were lower than expected.
Third-quarter net income rose to $408 million, or 82 cents a share, from $367 million, or 74 cents, a year earlier, Greenwood Village, Colorado-based Newmont said today in a statement. Profit excluding one-time items was 46 cents a share, topping the 32-cent average of 17 estimates compiled by Bloomberg. Sales declined to $1.98 billion from $2.48 billion, less than the $2 billion average estimate.
Newmont’s Gary Goldberg is among chief executive officers in the industry looking for ways to bolster profit margins after gold slipped into a bear market in April. Newmont is aiming to reduce its cost to produce an ounce of gold by about $125 by 2015, Goldberg said Sept. 24. The company has cut its corporate office staff by almost 30 percent and reduced spending compared with last year, he said.
Newmont’s average cost applicable to sales was $649 an ounce, compared with $693 a year earlier and the $717 average of six estimates compiled by Bloomberg. Copper costs were $2.63 a pound, compared with $2.38 last year.
On Oct. 10, Newmont reported preliminary third-quarter gold output of 1.28 million ounces and copper production of 34 million pounds, compared with 1.24 million and 35 million a year earlier. Metal sales were 1.26 million ounces and 35 million pounds, compared with 1.21 million and 37 million in the same period of 2012.
Gold averaged $1,328 on the Comex in New York in the third quarter, 20 percent less than a year earlier and 6.3 percent lower than the second quarter.
The third-quarter results were released after the close of regular trading in New York. Newmont fell 2.8 percent to $27.26 at 4:02 p.m. today.
Barrick Gold Corp. (ABX), based in Toronto, is the biggest gold producer by sales.
(Newmont scheduled a conference call for 10 a.m. New York time tomorrow. U.S. callers should dial 1-888-566-1822, international callers 1-312-470-7116. Pass code: Newmont.)
To contact the reporter on this story: Liezel Hill in Toronto at email@example.com
To contact the editor responsible for this story: Simon Casey at firstname.lastname@example.org