Newmont (NEM) To Post Q4 Earnings: What's In The Offing?

Newmont Goldcorp Corporation (NYSE:NEM) is scheduled to report fourth-quarter 2019 results on Feb 20, before the opening bell.

The company has trailing four-quarter positive earnings surprise of 10.8%, on average. Its fourth-quarter performance is likely to have benefited from higher grades and increased gold prices.

Let’s see how things are shaping up for the upcoming announcement.

What to Expect

In November 2019, Newmont revised its outlook for 2019. The company reduced its attributable gold production guidance for 2019 to 6.3 million ounces compared with 6.5 million ounces projected earlier.

For 2019, all-in sustaining costs for gold are projected to be $965 per ounce, down from the previous expectation of $975. Costs applicable to sales expectation for gold are $715 per ounce compared with $735 expected earlier.

For 2019, attributable production from North America operations is projected to be around 1,060,000 ounces and the same in South America is expected to be 1,295,000 ounces. All-in sustaining cost at North America and South America is anticipated at $1,210 per ounce and $785 per ounce, respectively.

Factors at Play

The company’s fourth-quarter production is likely to have benefited from the Ahafo mine, which is gaining from higher grades in both the Subika open pit and underground. Higher grades at Akyem, Cerro Negro and Eleonore are also expected to have contributed to the company’s fourth-quarter performance.

Tanami has been demonstrating solid performing lately. It delivered strong results in the third quarter and fourth-quarter operations are expected to reflect highest production levels at lowest cost for 2019. The company is likely to have benefited from higher grade stopes in the quarter to be reported.

Moreover, the company’s performance is likely to have benefited from higher gold prices in the fourth quarter. Uncertainties regarding the U.S.-China trade war, rate cuts by the U.S. Federal Reserve, global downturn concerns and tensions in the Middle East are some factors that have supported gold prices in 2019. The benefits of higher year-over-year gold prices are expected to have been tailwinds in the to-be-reported quarter.

Q4 Estimates

The Zacks Consensus Estimate for fourth-quarter consolidated revenues is currently pegged at $3,105 million, which suggests a surge of 51.6% year over year.

What the Zacks Model Says

Our proven model doesn’t conclusively predict an earnings beat for Newmont this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Newmont is -2.66%. The Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at 46 cents and 48 cents, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Newmont currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Likely to Beat Estimates

Here are some companies that you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Eldorado Gold Corporation (NYSE:EGO) , scheduled to release fourth-quarter 2019 earnings on Feb 20, has an Earnings ESP of +23.81% and carries a Zacks Rank #3.

Apache Corporation (NYSE:APA) , slated to release fourth-quarter 2019 earnings on Feb 26, has an Earnings ESP of +27.42% and carries a Zacks Rank #3.

Builders FirstSource, Inc. (NASDAQ:BLDR) , scheduled to release fourth-quarter 2019 earnings on Feb 20, has an Earnings ESP of +1.45% and sports a Zacks Rank #1.

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