Miners trade lower despite reporting record profits
Market cools off following the U.S. election and year-long rally that has sent prices to new highs
Most gold mining companies reported earnings in the past two weeks, and many are trading lower amid a drop in gold prices concerning the U.S. election and a noticeable rise in all-in sustaining costs.
Below is a snapshot of the five largest publicly traded gold producers and how their stocks performed after releasing earnings.
Newmont Corp. (NEM)
The largest gold mining company in the world got a bit smaller following its Oct. 23 earnings report that sent share prices from $57 to $49. In the two weeks following, Newmont has continued to drop and is now trading under $45 a share, marking a 21% decrease. The company reported earnings per share of 0.81, compared to estimates of 0.86.
Newmont was the first of the major mining companies to release its Q3 results. The company reported significant growth and its most profitable quarter in years, but investors showed concern about growing costs with costs applicable to sales reaching $1,207 per ounce, up more than 30% year-to-date and above analyst expectations.
Barrick Gold Corp. (GOLD)
Barrick announced a slight miss on Thursday, reporting 0.30 earnings per share on estimates of 0.31.
The stock price responded moderately and is up a few cents to $18.30 since the data release.
Revenue increased 18% over last year’s Q3 to $3.37 billion and net income rose 31% from the previous year’s quarter totaling $483 million.
Reuters reported a notable decrease in output from Nevada Gold Mines, which fell to 385,000 ounces in the quarter compared with 401,000 ounces in Q2. All in sustaining costs rose to $1,507 per ounce, up from $1,255 per ounce last year.
Agnico Eagle (AEM)
Agnico Eagle posted a significant beat of Wall Street estimates, topping expectations of 1.02 earnings per share with an impressive 1.14 result in Q3.
However, share prices slid from about $88 per share to $83.75, a nearly 5% drop since the earnings report was released on Oct. 30.
Agnico is receiving attention from investors, however, due to its recent performance compared to its peers. Year-over-year cash flow growth for the company is 23.5%, which is higher than many of its competitors, according to a report from Zacks.
AngloGold Ashanti (AU)
Perhaps the most interesting of the five largest publicly traded gold miners, AngloGold Ashanti released an earnings report Thursday detailing a Q3 earnings per share result of 0.53.
The stock traded flat and is priced a few pennies higher on Friday, at $27.17 per share, compared to earnings day.
CEO Alberto Calderon said, “Tight control of costs and active management of our working capital means that the higher gold price has flowed through to our bottom line.”
Adjusted EBITDA grew 339% in Q3’24 compared to Q3’23 and free cash flow rose from $20 million in the same period last year to $347 million.
Cash costs per ounce rose just 8% year-over-year to $1,172 per ounce compared to $1,089 per ounce in Q3’23.
Kinross Gold Corp. (KGC)
Of the top five producers of gold, Kinross is the only company to post any notable rise in stock price following its earnings release on Tuesday.
Kinross reported earnings per share of 0.24 on estimates of 0.19 and the stock is trading slightly higher from $10.25 at the time of release to $10.47 in Friday morning trading.
The company reported significant margin growth and, like most of its peers, record free cash flow, along with a $350 million debt repayment.
All-in sustaining costs dropped from Q2 to $1,350 per ounce and the company reported it is on track for production of 2.1 million ounces in 2024.
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