New Gold Shares Up After Profit Tops Targets

New Gold has a better-than-expected quarter as sales volumes jump from last year.

Author:: Scott Eden
Publish date:: May 13, 2009 4:00 PM EDT

New Gold has a better-than-expected quarter as sales volumes jump from last year.

New Gold

shares bucked the broader downward market trend Wednesday after the company announced profits that topped estimates.

Thanks to a jump in sales volumes of gold -- and in spite of declining gold prices -- the company reported a first-quarter EPS of 6 cents a share, a nickel better than analysts' targets. That represents profit growth of 23%, to $12 million from last year's $9.8 million. Revenue growth was a bit slower: 5% to $58.8 million.

The company said it sold about 55,400 ounces of gold in the quarter, up from about 52,000 a year ago. Prices, meanwhile, dropped to $898 an ounce on average from last year's $933 an ounce.

New Gold kept its production guidance the same: it expects to mine 190,000 to 210,000 ounces of gold for the rest of the year, at a cost of $465 to $485 an ounce.

Shares of the Vancouver mining company were up as much as 2% to $2.24 in afternoon trading Wednesday on more than double the daily average volume. New Gold stock has been under pressure since spiking to near its 52-week high of $10 back in September.

Other mining and metals stocks didn't fare so well Wednesday. Bellwethers

Freeport McMoRan

(FCX) - Get Report

and

Newmont Mining

(NEM) - Get Report

were down 6% and 3.3%, respectively, while

Eldorado Gold

(EGO) - Get Report

was off 4% and

Ivanhoe Mines

(IVN)