Newmont Soars on Profit Beat With Rising Gold Providing Tailwind

(Bloomberg) -- Newmont Corp. climbed after the world’s largest gold miner reported earnings that beat analysts’ expectations, helped by a tailwind from higher bullion prices.

Miners have been sharing the windfall from stronger prices with investors in the form of higher dividends. Newmont led the pack in January with its promise of a 79% hike to $1 per share annually. The increase will take effect later in the year.

Newmont is considering “other shareholder friendly actions” it might take in the future, Chief Financial Officer Nancy Buese said Thursday on the fourth-quarter earnings call. A key such action “will be to determine our appropriate level of dividend on a go forward and sustainable basis,” she said.

Newmont rose as much as 6.1%, the most intraday in almost a year, while an index of senior gold miners gained as much as 1.1%. Newmont was trading up 4.2% as of 10:58 a.m. in New York, increasing its gains in the past 12 months to 36%.

Adjusted fourth-quarter earnings were 50 cents a share on revenue of $2.97 billion, the Greenwood Village, Colorado-based miner said in its earnings statement. That beat analysts’ estimates for 46 cents and sales of $2.93 billion.

The company’s production and cost guidance over the next five years was unchanged, solidifying its lead over rival Barrick Gold Corp.

Spot gold averaged about $1,483 an ounce in the fourth quarter, 21% more than a year earlier. The metal has extended gains this year to trade above $1,600 as the coronavirus weighs on expectations for economic growth, fueling investor demand for haven assets.

The rise in gold prices helped mitigate higher cost of sales at the assets it acquired through its $10 billion merger with Goldcorp Inc. last year.

To contact the reporter on this story: Danielle Bochove in Toronto at dbochove1@bloomberg.net

To contact the editors responsible for this story: Luzi Ann Javier at ljavier@bloomberg.net, Steven Frank, Reg Gale

©2020 Bloomberg L.P.