Gold prices soar, the world's largest gold mining company's Q1 profit far exceeds expectations, and cash flow hits record

Source: Wall Street Insights

Driven by the continuous new highs in the price of gold, Newmont, the world's largest gold mining company, has delivered an impressive financial report.

On Wednesday, April 23, the gold mining giant Newmont released its first-quarter financial report, and its profit performance was astonishing:

The net profit soared to $1.9 billion, equivalent to earnings per share of $1.68. Compared with the net profit of $179 million ($0.15 per share) in the same period last year, the net profit has nearly increased by 11 times.

The adjusted earnings per share reached $1.25, significantly exceeding the analysts' expectation of 90 cents.

The revenue in this quarter increased from $4.02 billion in the same period last year to $5.01 billion, exceeding the analysts' expected $4.7 billion.

It is reported that although the company's gold production in the first quarter decreased by 8.3% to 1.54 million ounces, the average gold price realized by Newmont was $2,944 per ounce, an increase of 11% compared with the previous quarter and a sharp increase of 41% compared with the same period last year, which was sufficient to offset the impact of the decrease in production.

Affected by the strong financial report, during the after-hours trading of U.S. stocks, Newmont's share price rose by 2% in response, and then the increase narrowed to about 1%.

Since the beginning of this year, the price of gold has hit new highs several times, and it once soared to $3,500 per ounce this week. Tom Palmer, CEO of Newmont, said that geopolitical concerns, strong central bank purchases, and inflationary pressures have provided all-round support for the gold price. Palmer said:

Trade tensions and Trump's import tariffs on products including steel and aluminum have not directly affected Newmont yet, but the company is still continuously monitoring the situation. Tariffs may lead to an increase in the cost of certain raw materials, but the company's geographical diversity and long-term contracts provide a certain buffer. At the same time, the recent decline in oil prices may reduce the energy costs of miners.

The Asset Divestiture Strategy Is Effective, and the Cash Flow Reaches a Record High

Palmer said that the company is on track to achieve its full-year guidance, including a gold production of about 5.9 million ounces, which is a decrease compared with 6.85 million ounces in 2024.

Despite the decline in production, the company's free cash flow in the first quarter still reached a record $1.2 billion.

It is reported that Newmont completed its asset divestiture plan this month, with total proceeds of approximately $4.3 billion, far exceeding the initial target of divesting small mines and development projects. These sales include after-tax cash proceeds of more than $2.5 billion expected to be obtained in the first half of this year.

The company acquired Australia-based Newcrest for $17.14 billion in 2023 and said in February last year that it would divest some non-core assets and lay off employees to reduce debt. As of March 31, the company's debt was $3.22 billion.

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