In this undated handout photo from Newmont Mining Corporation, gold nuggets and bars are shown.The Associated Press
Newmont Mining Corp.'s second-quarter profit rose on a soaring gold price, but the results missed Wall Street expectations and the company's stock fell in premarket trading.
Net earnings from continuing operations were $523-million (U.S.), or $1.06 per share, compared with $382-million, or 78 cents per share, a year earlier, the Denver-based company said.
Adjusted for certain items, earnings were 90 cents per share, and on that basis, they fell short of analysts' average estimate of 99 cents per share, according to Thomson Reuters I/B/E/S.
Sales rose 11 per cent to $2.4-billion, said the company, which operates mines in North and South America, Africa, Australia and Indonesia. Its average realized price for gold rose 25 per cent in the second quarter to $1,501 per ounce over the 2010 quarter.
The tenuous state of the global economy has sent the price of gold soaring to record highs in recent months. Spot gold prices rose 5 per cent in the second quarter to end at $1,499 June 30. It is now around $1,608.
The higher metal prices offset a drop in gold and copper production, Newmont said.
Gold production of 1.2 million ounces was down 5 per cent from the 44 million pounds of copper mined was 45 per cent lower.
The lower production was a result of processing lower grade stockpiles at Batu Hijau, in Indonesia and lower grade ore in Nevada, the company said.
But it maintained its 2011 outlook for gold production of 5.1 million to 5.3 million ounces and copper production of 190 million to 220 million pounds.