The US’s largest gold-mining company Newmont Mining Corp. (NEM) watched its stock drop on Friday after releasing its quarterly earnings report.
Shares were down 1.3 percent as Newmont posted a surprise second-quarter loss of $2 billion, or $4.06 per share on revenue of $1.99 billion, compared to the prior year period during which the company made a net profit of $279 million, or $0.56 per share on revenue of $2.23 billion. Adjusted for one-time items the loss cuts back to $0.10 per share, still a far cry from analyst expectations of $0.42 per share, while revenue had been projected at $2.09 billion.
Mining companies who rely on gold have had an incredibly rough time as of late, as the price of the yellow metal has been locked in a painful decline that has gained momentum in 2013. For Newmont, this has translated during the second quarter to a $1.77 billion write-down on the value of company assets, primarily its stockpiles, as well as two of its Australian mines.
Discussing the results, CEO Gary Goldberg said in a statement that the company had cut costs during the first half of the year by $362 million, and said that it would be laying-off more than one-third of its corporate workforce.
And Newmont is not the only mining company to have suffered multi-billion dollar write downs during Q2 2013. One of the company’s competitors, Goldcorp Inc. (GG) , posted its own $2 billion loss on the declining value of its Mexican Penasquito mine.
In addition to problems with gold, the company saw an 11 percent drop in copper production to 34 million pounds, while other mining companies, such as Rio Tinto Plc (RIO) and BHP Billiton Plc (BBL) have upped both production and sales of the metal.
Shares for Newmont were trading for $29.64 heading toward Friday’s closing bell. The stock has dropped nearly 35 percent year-to-date.