Newmont 1Q Net Down 50% On Lower Prices, Cuts 3% Of Work Force

   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 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.

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; [e-mail]