Newmont Corporation (NYSE: NEM) releases its fourth-quarter 2021 earnings and revenue results that beat estimates on Thursday, February 24, 2021.
What to look for: in the fourth quarter, the company’s attributable gold production dropped by almost 1% YoY to 1.62 million ounces. During the quarter average realized gold price dropped 3% YoY to 1,798 per ounce, and the cost applicable to sales for gold was up 9% YoY to $802. All-in sustaining costs were 1% up from last year to 1,056 per ounce attributed to high CAS per ounce. For FY 2022, the company is anticipating attributable gold production or around 6.2 million ounces with gold CAS of $820 per ounce and AISC of $1,050 per ounce. The guidance reflects ongoing investment in promising growth assets and operating assets, and increased gold production.
Earnings: Stockearning’s Estimated EPS was $0.76, but the company registered EPS of $0.78. Net loss from continuing operations was $16 million or $0.08 per share in Q4 2021 compared to a net income of $806 million or $1 per share in Q4 2020. For the whole year, the company had EPs of $1.39 per share versus $3.31 per share in 2020. Historical EPS performance shows that in the past 12 quarters, the company has topped estimates six times (50%) and missed six times (50%).
Revenue: Newmont reported 0.3% growth in revenue in Q4 2021 to $3.339 billion, beating analysts' estimates of $3.334 billion. The company saw net sales increase 6.3% to $12.22 billion for the full year. At the end of the quarter, the company had $4.992 billion in cash and equivalents.
Stock movement: NEW shares have gained 18.6% since the company released its last earnings release. Interestingly, the company’s shares have been DOWN in the last 26 quarters following earnings releases out of 48 quarters. So, the historical price reaction suggests a 54% probability of the share price going DOWN following the earnings release. According to the Stockearning algorithm, the predicted volatility on the first day is +/-3%, while the predicted volatility on the seventh day is +/-4%.
What analysts are saying: Canaccord analyst Carey MacRury downgraded NEM from Buy to Hold and set a price target of $65 on the shares. Also, Scotiabank analyst Tanya Jakusconec downgraded NEM from Buy to Hold, citing share price performance and quite low return to a reviewed price target from $75 to $72.
National Bank analyst John Sclodnick raised his price target on NEM shares from C$92 to C$98 ad maintained a Buy rating on the stock. However, CIBC analyst Anita Soni downgraded the stock from Buy to Neutral and lowered her price target on the shares from $81 to $69, citing a lack of clarity on Newmont's outlook.
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