(Updates with earnings excluding items)
DOW JONES NEWSWIRES
Newmont Mining Corp.'s (NEM) first-quarter net income dropped
50% on lower commodity prices as the company said it cut about 3%
of its work force.
Mining companies have been struggling as gold prices haven't
been able to hold rallies and have fallen back in recent weeks.
In its filing with the U.S. Securities and Exchange Commission,
the company said the quarter's expenses reflected costs related to
a global work force reduction that involved nearly 3% of its work
force. It didn't say when the cuts took place or give further
details.
Chief Executive Richard O'Brien said lower commodity prices both
hurt and helped performance, as lower copper prices hurt earnings
and cash flow, but lower-than-expected diesel-fuel prices resulted
in lower costs.
The world's second-largest gold miner behind Barrick Gold Corp.
(ABX) posted net income of $277 million, or 40 cents a share, down
from $557 million, or 80 cents a share, a year earlier. Last year's
results included a 1-cent gain from discontinued operations.
Excluding items, earnings were 44 cents
Revenue decreased 20% to $1.55 billion.
Analysts surveyed by Thomson Reuters expected earnings of 42
cents on revenue of $1.4 billion.
Gross margin fell to 51.5% from 59.3%. Gold sales declined 7.9%
to $1.39 billion.
Copper sales slumped 63% as prices remain far below where they
were for most of last year.
Earlier this month, international arbitrators said Newmont has
to sell 17% of its unit in Indonesia, PT Newmont Nusa Tenggara, or
be found in default of its contract. The company has filed for
arbitration about the stake in the company before, saying the
government is blocking the sales. Indonesia's government said this
month it aims to buy a 21% stake in the unit.
Under Newmont's 1986 contract with the Indonesian government, it
is required to sell 51% of PTNNT to local investors by 2010. A 20%
stake has already been sold to a privately held local firm.
Looking forward, the company affirmed its full-year equity gold
sales outlook of 5.2 million to 5.5 million ounces.
Newmont's shares closed Wednesday at $40.71 and haven't traded
premarket.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com
