Newmont Mining Corp., the largest U.S. gold producer, reported second-quarter earnings that fell from a year earlier as prices for the metal declined.
Net income dropped to 14 cents a share from 36 cents a share a year earlier, Colorado-based Newmont said Wednesday in a statement. Earnings excluding one-time items were 26 cents a share, trailing the 27-cent average of 15 estimates compiled by Bloomberg. Sales were $1.91 billion, lower than the $1.99 billion average estimate.
Newmont is working to cut costs and debt after a sustained slide in the price of the metal, which dropped to a five-year low this week. A rout in bullion this month has sapped investor confidence in gold miners, sending the benchmark 30-member Philadelphia Stock Exchange Gold and Silver Index of the largest producers to its lowest since 2001.
"At the end of the day, they do have higher-cost assets," Pawel Rajszel, a Toronto-based analyst at Veritas Investment Research Corp, said in a July 13 telephone interview. "They also have a significant debt load."
The metal's plunge is eroding profits at mines across the globe and stressing balance sheets in an industry where the biggest producers are weighed down by a record debt load of $31.5 billion.