Newmont posted Q4 earnings that just missed analyst estimates amid higher costs. The gold-mining giant also slashed its quarterly dividend, but gave upbeat longer-term production guidance, citing increased gold reserves. NEM stock edged higher in early Thursday stock market action.
Newmont Dividend Cut
Analysts had expected a cut to the quarterly dividend, which had held at 55 cents per share for the past eight quarters. Newmont declared a 40-cent dividend, which represents a 27% cut. However, Newmont said the dividend could vary based on gold prices and free cash flow.
Newmont's annual base dividend is $1 per year, assuming a gold price of $1,400 per ounce. But that base dividend can rise 40 cents to 80 cents per year, based on a $1,700 gold price. The new $1.60 annual dividend pace is at the midpoint of the expected payout range.
The current spot gold price is about $1,825, though Newmont projects a $1,700 price for 2023.
Newmont Earnings
Newmont earned 45 cents per share, down 42% from a year ago and one cent below analyst forecasts. Revenue slipped 5.6% to $3.2 billion, but came in ahead of estimates.
Newmont realized an average gold price of $1,758 per ounce, down from $1,798 a year ago. Meanwhile, all-in sustaining costs — a gold industry measure which includes adjusted operating costs and capital expenditure, corporate general and administrative expenses, as well as exploration expense — rose to $1,215 per ounce of gold from $1,056.
The company reiterated guidance of 2023 gold production of 5.7 million to 6.3 million gold ounces. But the outlook "steadily improves" to a range of 6.1 million to 6.7 million ounces in the longer term, helped by "an unmatched organic project pipeline."
Newmont said it has 96.1 million ounces of gold reserves, up from 92.8 million ounces at the end of 2021. "Newmont replaced depletion and grew reserves by nearly 4% as we continued to focus on extending mine life, developing districts and discovering new opportunities in the most favorable mining jurisdictions," CEO Tom Palmer said in a statement.
NEM Stock
NEM stock slipped 0.2% in early Thursday stock market action. NEM stock has come under pressure since Feb. 3, after the blowout January jobs report sent Treasury yields and the dollar higher and as markets began to price in additional Fed rate hikes.
