Newmont Corporation (NEM, Financial), the world's largest gold mining company, reported a significant increase in first-quarter profits, reaching $1.9 billion compared to $179 million in the same period last year. Adjusted earnings per share were $1.25, surpassing analysts' expectations of $0.90. Despite an 8.3% decline in gold production to 1.54 million ounces, the surge in gold prices, which averaged $2,944 per ounce, offset the production drop. This average price marked an 11% increase from the previous quarter and a 41% rise year-over-year.
Following the strong earnings report, Newmont's stock price rose by 2% in after-hours trading before settling at a 1% increase. Gold prices have repeatedly hit new highs this year, reaching $3,500 per ounce. CEO Tom Palmer attributed this to geopolitical tensions, strong central bank purchases, and inflation pressures. Although trade tensions and tariffs have not directly impacted Newmont, the company is monitoring the situation closely. The recent decline in oil prices may reduce energy costs for miners.
Newmont's asset divestment strategy has been effective, with free cash flow hitting a record $1.2 billion in the first quarter. The company completed asset sales totaling approximately $4.3 billion, surpassing initial targets. These sales include expected after-tax cash proceeds exceeding $2.5 billion in the first half of the year. In 2023, Newmont acquired Newcrest for $17.14 billion and plans to divest non-core assets to reduce its $3.22 billion debt as of March 31.
