Newmont Stock: Shares Fall 6.23% After Q3 Results
Newmont's stock closed down 6.23% on Thursday, October 24 at $83.37, affected by disappointing forecasts for the fourth quarter despite quarterly results exceeding expectations. The stock has seen a decline of 8.15% since the beginning of the week, creating a slight divergence from the American market where the S&P 500 advanced 0.36% in the session. This weekly performance contrasts with the spectacular gain of 69.28% accumulated over the past twelve months.
Context of the Decline
The decline in the stock occurs in a context of position rotation. The trading volume on Thursday was established at 21.3 million shares, representing 1.94% of the gold miner's market capitalization. This sustained liquidity reflects the intensity of trading following the announcement of the third-quarter results and tempered outlook for the fourth quarter. Beyond the day, the annual performance remains strongly positive. Newmont has recorded a gain of 69.28% over twelve months, outperforming the benchmark S&P 500 index, which has risen 18.33% over the same period. The contrast between the annual bullish trajectory and the recent pullback illustrates the impact of cash and production-related factors on short-term market operator expectations.
Third Quarter Financial Performance
For the third quarter ended September 30, Newmont reported revenues of $5.52 billion, up from $4.6 billion a year earlier, supported by an average gold price of $3,539 per ounce compared to $2,518 a year earlier. Net profit attributable to shareholders was $1.8 billion, significantly exceeding the $922 million from the comparable period of 2024. Adjusted EBITDA was $3.30 billion compared to $1.97 billion a year earlier. Adjusted diluted earnings per share came out to $1.71, more than doubling the annual comparison of $0.81. The profit momentum was supported by a 2.8% decrease in all-inclusive production costs to $1,566 per ounce, resulting from operational efficiency gains. These figures substantially exceeded consensus estimates, validating the impact of this year's record gold prices.
Challenges in Cash Flow Expectations
However, the free cash flow has burdened investor expectations. Although the free cash flow reached a record level of $1.57 billion for the past quarter, $1 billion more than the second consecutive quarter above the billion, Newmont anticipates a cash flow trough in the fourth quarter. The group expects a deterioration of free cash flow due to the construction of water treatment facilities at Yanacocha in Peru and severance provisions made in the third quarter. This outlook for reduced flow in the last quarter, despite a favorable gold environment with gold above $4,000 an ounce, justified the market's bearish reaction and explains the majority of the 6% decline recorded at the close.
