Newmont quarterly profit more than doubles on rising gold prices

(Reuters) - Newmont Corp NEM.N shares rose on Thursday after the miner said its quarterly adjusted profit more than doubled, benefiting from a rise in bullion prices after investors sought refuge in safe-haven assets due to the COVID-19 pandemic.

FILE PHOTO: Visitors speak with a representative at the Newmont Corp booth at the Prospectors and Developers Association of Canada (PDAC) annual conference in Toronto, Ontario, Canada March 1, 2020. REUTERS/Chris Helgren

Gold prices XAU= touched record highs during the quarter as a slowdown in economic activity and surging coronavirus cases sent investors to the precious metal, long seen as a hedge against inflation and currency debasement.

The miner said its average realized gold price jumped 30% to $1,913 per ounce in the third quarter, while attributable gold production fell 6% to 1.54 million ounces.

Excluding items, the Colorado-based company earned 86 cents per share in the quarter, up from 36 cents per share a year ago.

Net income from continuing operations fell to $611 million, or 76 cents per share, from $2.3 billion, or $2.71 per share, in the year-ago quarter that included a $2.4 billion gain on the formation of Nevada Gold Mines.

Shares of the gold producer rose as much as 4% before paring gains.

Third-quarter revenue of $3.17 billion missed an estimate of $3.29 billion, according to Refinitiv IBES data, while earnings per share of 86 cents beat an average of 85 cents.

Newmont on Wednesday increased its quarterly dividend 60% to 40 cents per share.

Credit Suisse analyst Fahad Tariq said the timing and magnitude of the increase was a surprise “in a positive way.”

The miner also set a dividend framework that includes a “base” payout of $1 per share annualized at a gold price of $1,200 per ounce.

Reporting by Yajush Gupta in Bengaluru; additional reporting by Jeff Lewis in Toronto; Editing by Steve Orlofsky and Lisa Shumaker