Newmont Mining Corp., the biggest U.S. gold producer, reported first-quarter earnings that missed analysts’ estimates after gold prices fell and costs rose.
Net income declined to $315 million, or 63 cents a share, from $490 million, or 97 cents, a year earlier, Greenwood Village, Colorado-based Newmont said Monday in a statement. Earnings excluding one-time items were 71 cents a share, trailing the 76-cent average of 16 estimates compiled by Bloomberg. Sales fell to $2.18 billion from $2.68 billion, lagging behind the $2.29 billion average of seven estimates.
Newmont Chief Executive Officer Gary Goldberg is trying to curb gold-mine operating costs that surged 40 percent between 2010 and last year amid rising prices for raw materials, equipment and labor. While the gold industry tries to tackle cost inflation, the commodity has slipped into a bear market.
Newmont, which operates mines in countries in the U.S., Indonesia and Australia, said April 24 its gold-linked quarterly dividend dropped to 35 cents a share from 42.5 cents.
The company’s so-called average consolidated costs applicable to sales in the quarter were $758 an ounce of gold, compared with $620 a year earlier. The average of three analysts’ estimates compiled by Bloomberg was for $740 an ounce.
Newmont on April 17 reported preliminary first-quarter output of 1.17 million ounces of gold and 38 million pounds of copper. The company said at the time it was reviewing options to improve cash flow and preserve financial flexibility “in light of the prevailing volatile metal price environment.”
Gold, which has risen for 12 consecutive years, fell into a bear market April 12 after falling more than 20 percent from a record closing price of $1,891.90 an ounce in August 2011. The metal reached a two-year intraday low of $1,321.50 on April 16, a day after plunging the most in three decades.
The metal averaged $1,631.89 in the first quarter, 3.7 percent less than a year earlier.
Newmont scheduled a conference call for 10 a.m. New York time Tuesday.
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