Newmont Crushes Targets, Shares Spike - TheStreet

DENVER (TheStreet) -- Newmont Mining (NEM) - Get Report posted record sales and profit in its fourth quarter, shattering Wall Street's estimates.

Investors appeared to like what they saw. On a day of steep losses among U.S. equities generally, shares of Newmont were gaining 2.7% to $47.73 Thursday morning.

Other gold miner stocks, which normally track one another closely, weren't performing as well as Newmont. Shares of

Barrick Gold

(ABX)

were slipping 5 cents to $36.66, while

Kinross

(KGC) - Get Report

was rising 4 cents to $17.63.

Among large-cap gold miners, Newmont is known by some analysts and investors as a slow-growth company. Indeed, looking ahead, Newmont said it expects to produce between 5.3 million and 5.5 million ounces of gold in 2010, which represents a slight increase over the previous year -- or, in the worst case, none at all: In 2009, Newmont mined 5.3 million ounces.

Newmont also expects an increase in its 2010 "costs applicable to sales" for gold -- or the amount of money it spends, per ounce, to extract gold from the earth, refine it, melt it into bricks and sell it. In 2009, those costs per ounce came to $417, down 4% from a year earlier. For 2010, Newmont is predicting costs of $450 to $480 an ounce.

Even while Newmont outperformed Wall Street's fourth-quarter expectations, the company admitted that an important mine in Australia -- one on which many of company's hopes for future growth hang -- showed disappointing results in the period.

The Australian venture, called Boddington, promises to put out 1 million ounces a year once it reaches full production, making it the biggest gold mine Down Under. The company, which completed construction of the expanded mine last year and has been ramping it up since, expects to extract 850,000 to 875,000 ounces of gold from the site in 2010.

For Newmont, the mine is of supreme importance, since the ore grades at the company's go-to site, the famed Carlin vein in Nevada, which essentially made Newmont's fortune in the 1970s, will only continue to deteriorate over time.

Newmont, of course, hasn't been simply resting on its pick axes. Aside from Boddington, the company has projects in various stages of progress around the world: in Ghana, Peru, Canada and several other nascent mines in Nevada.

For the fourth quarter, Newmont reported adjusted earnings of $558 million, or $1.13 a share. Analysts were expecting a per-share profit of 79 cents a share, according to a poll of sell-siders by Thomson Reuters.

Revenue in the quarter, meanwhile, came to $2.5 billion, also besting the Wall Street consensus target, which called for $2 billion.

Like all gold mining outfits, Newmont benefited from the record prices reached by the yellow metal late in the fourth quarter (on Dec. 3, gold hit $1,227.50 an ounce, an all-time high, thought not adjusted for inflation). A year ago, Newmont earned 1 cent a share on revenue of $4 million.

Other big precious-metals miners have bested analysts' estimates this earnings season, including

Barrick

and

Kinross

, both of which are, like Newmont, striving to explore and bring new mines online -- much of the time in developing countries, and often amid environmental protest -- in efforts to exploit the historically elevated price of their core metal.

-- Written by Scott Eden in New York

RELATED STORIES:

>>Barrick Outlook Depends on Cortez

>>Kinross Reiterates Scaled-Down Views

Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.