February 19, 2009 / 9:57 PM / 9 years ago

WRAPUP 2-Newmont, Goldcorp 4th-quarter profits top view

* Newmont Q4 Adj EPS $0.26 vs Wall St view of $0.25

* Goldcorp Q4 Adj EPS $0.12 vs Wall St view of $0.11

* Newmont, Goldcorp shares drop on weak day for golds (Adds details from Goldcorp call, updates shares)

By Euan Rocha

NEW YORK, Feb 19 (Reuters) - U.S. gold miner Newmont Mining (NEM.N) and its Canadian rival Goldcorp (G.TO) posted slightly better than expected quarterly results on Thursday as both companies kept a lid on mining costs while gold prices pushed higher.

However, core earnings for both fell due to plunging prices for by-product metals, and their share prices retreated along with other gold miners following a sharp recent runup.

Base metals such as zinc, nickel and copper have been hit by the deepening global recession, while silver prices also fell towards the end of 2008.

But gold prices have risen sharply in the last three months due to interest in the metal as a haven from risk.

Newmont, the world’s second-largest gold miner, reported net income of $10 million, or 2 cents a share, compared with a year-earlier loss of $289 million, or 63 cents a share.

Excluding special items, the Denver-based company’s quarterly earnings came to 26 cents a share, slightly above Wall Street’s average forecast of 25 cents.

“Basically they were in line, and they may say they beat the consensus by a penny or two, but the consensus had been coming down,” said HSBC analyst Victor Flores.

Newmont’s revenue fell 4.8 percent to $1.34 billion, hurt by the slump in copper sales.

Newmont expects 2009 gold sales of 5.2 million to 5.5 million ounces, at costs applicable to gold sales of $400 to $440 per ounce.

The company operates gold and copper producing mines in the United States, Peru, Australia, Ghana and Indonesia, among other countries.


Goldcorp’s fourth-quarter net income more than tripled, meanwhile, due to a massive noncash foreign exchange gain on the revaluation of future income tax liabilities.

Canada’s No. 2 gold producer earned $958.1 million, or $1.31 a share, up from $256.6 million, or 36 cents a share, in the year-before period.

Stripping out the gain, the company earned $85.4 million or 12 cents a share — just above the expected profit of 11 cents a share, as polled by Reuters Estimates.

Quarterly revenue fell 10 percent to $609 million, as an 11 percent rise in gold production was more than offset by lower prices for silver and copper, which it produces as byproduct.

Canada’s Agnico-Eagle Mines, which reported quarterly results on Wednesday, also said plunging base metal prices had eroded some of their profits from gold production.

Stripping out the impact of the silver and copper prices, Goldcorp’s cost per ounce retreated to $323 from $358.

Industry-wide cost pressures have eased somewhat because of the sharp drop in the price of oil and other consumables used in the mining process.

But Goldcorp Chief Executive Chuck Jeannes, who took over the top job at the company in January, warned against expecting a quick reversal of the rampant cost inflation miners experienced through the middle of last year.

“We are starting to see some reductions in consumables... but the fact is costs tend to go up a lot faster than they come down,” he said on a conference call.

He also said that about 40 percent of production costs are for labor, which “don’t come down significantly at all”.

Vancouver, British Columbia-based Goldcorp has mines in Canada and throughout Latin America.

Shares of Newmont fell 4.6 percent to $40.79 on the New York Stock Exchange, while Goldcorp slid 4.2 percent to C$39.14 in Toronto.

$1=$1.26 Canadian

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