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Newmont's Quarter Doesn't Pan Out

Mine closures contribute to 50% less profit.

Shares of Newmont Mining (NEM) - Get Newmont Goldcorp Corporation (NEM) Report were lower after the company said planned mine closures and divestitures contributed to cutting second-quarter profit in half.

The Denver-based mining company said net income fell to $37.5 million, or 8 cents a share, down from $90.8 million, or 22 cents a share, in the same period last year.

The latest quarter included an asset impairment charge of $47.8 million, or 11 cents a share. Excluding the charge, the company fell 4 cents short of analysts' consensus estimate of 23 cents a share.

Revenue rose to $1.01 billion from $736.7 million in the previous year.

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Newmont said lower second-quarter net income resulted from planned mine closures and divestitures, processing lower grade material and the asset impairment charges.

Gold sales fell 10% to 1.64 million equity ounces of gold, however the average price of gold rose 12% to $395 an ounce. Gold prices in July rose near $410 an ounce but have recently slipped back below $390 an ounce.

The company reaffirmed 2004 equity gold sales guidance of between 7 million and 7.2 million ounces and total cash costs of between $225 and $235 an ounce. Equity gold sales for the second half of 2004 are weighted toward the fourth quarter, particularly in Nevada and at Yanacocha in Peru.

Newmont shares were recently up 30 cents to $39.25.