Newmont Corporation (ASX: NEM) delivered a strong second-quarter result, producing approximately 1.3 million attributable gold ounces and generating record second-quarter free cash flow of US$2.2 billion.
However, the market reaction was negative. Newmont’s ASX-listed shares fell 1.53% on Friday to A$134.76. Its New York-listed stock also dropped about 1.6% to US$93.19. Investors appeared to focus on lower production, higher quarterly costs and revenue that missed expectations.
Earnings Beat Expectations
Newmont reported adjusted net income of US$2.2 billion, equal to US$2.10 per diluted share. That was above the US$1.99 expected by analysts.
Revenue increased to US$6.12 billion from US$5.32 billion a year earlier. However, it fell short of the US$6.36 billion analyst estimate. This may explain why the shares declined despite strong profit and cash flow.
The company generated US$2.9 billion in operating cash flow. It ended June with US$9.0 billion in cash, US$13.0 billion in liquidity and a net cash position of US$3.4 billion.
Newmont Returned US$1.9 Billion to Shareholders
Newmont returned US$1.9 billion to shareholders through dividends and share repurchases since its previous earnings call.
The total included US$1.7 billion of share buybacks. Newmont still has US$4.3 billion available under its US$6.0 billion repurchase authorisation. It also declared a quarterly dividend of US$0.26 per share.
Since February 2024, Newmont has reduced its share count by more than 100 million shares, or approximately 9%. A lower share count increases each remaining investor’s exposure to future earnings and cash flow.
Production Fell and Costs Increased
Newmont produced 1.293 million attributable gold ounces during the quarter, down from 1.48 million ounces a year earlier.
Production was affected by seismic activity near the Cadia mine in Australia and lower output at Ahafo South, Peñasquito and Yanacocha.
Gold all-in sustaining costs increased to US$1,621 an ounce from US$1,029 in the previous quarter. Newmont said lower production, higher sustaining investment and additional Cadia costs contributed to the increase.
The average realised gold price was US$4,414 an ounce, above US$3,320 a year earlier but below US$4,900 in the first quarter.
Is Newmont Stock Still a Buy?
Newmont maintained full-year production guidance of 5.3 million attributable gold ounces. Management also said year-to-date costs remained well below full-year guidance.
The investment case is supported by strong free cash flow, a healthy balance sheet and large shareholder returns. Investors who expect gold prices to remain elevated may still see Newmont as an attractive way to gain gold exposure.
However, lower production, rising costs and changes in gold prices could limit future gains. Newmont shares have also performed strongly over the past year, which may have raised expectations before the result.
The next test will be whether Newmont can lift second-half production, control costs and meet its 5.3-million-ounce target. Friday’s decline shows that investors expect both strong cash flow and reliable operational delivery.
