After reporting a lacklustre performance in the fourth quarter of 2007, Newmont Mining [NYSE:NEM] rebounded in Q1 2008 with earnings 60% higher than last quarter and five times higher than Q1 2007. The company enjoyed higher gold prices and lower production costs, but output remains flat.

For the quarter that ended March 31, Newmont reported net income of $370 million, or 82 cents per share, compared with net income of $68 million, or 15 cents per share, in the first quarter of 2007. Profit excluding some items was 83 cents a share. Revenue totalled $1.94 billion, compared with $1.22 billion in the year-ago quarter.

Analysts surveyed by Thomson Financial forecast income of 54 cents per share on revenue of $1.66 billion. The average estimate of 16 analysts surveyed by Bloomberg was also 54 cents.

In the fourth quarter of 2007, the company reported profit excluding one-time items of 51 cents a share or $228 million. Including one-time items, Newmont reported a net loss of $289 million, or 63 cents a share, in the fourth quarter. The company reported revenue of $1.41 billion but a loss of $933 million from continuing operations.

Newmont sold 1.29 million equity ounces of gold last quarter, receiving an average price per ounce of $933, compared with sales of 1.294 million equity ounces at an average price of $649 in the year-ago quarter. The gold price averaged about $927/oz from January through March 2008.

Our position as the largest unhedged gold company has benefited our shareholders as we realized 100% of the gold price appreciation with an average realized gold price for the quarter of $933 per ounce, said Richard O'Brien, President and CEO, who took over as head of the Denver-based miner last July.

With gold sales in line with our plans and lower costs, our gold operating margin increased to 58%, up from 38% in the year ago quarter, highlighting our leverage to the gold price, he added.

Costs applicable to sales dipped 2.2% to $396/oz in the quarter; however, Newmont said in February that production costs will rise as much as 11% this year to $425 to $450 an ounce from an average $406 last year. The company forecast gold output of 5.1 million to 5.4 million ounces in 2008, compared with 5.3 million ounces last year, down from 5.9 million ounces in 2006.

In comparison, Barrick [NYSE:ABX; TSX:ABX], the world's largest gold producer, told delegates at this year's Mining Indaba that the company is on track with its estimate of 8.1 million ounces of gold production at a cash cost of $350/oz for 2007. This would be down from last year's 8.64 million ounces of gold at total cash costs of $282/oz.

AngloGold Ashanti [NYSE:AU], the world's second largest gold producer after trumping Newmont in 2007, is expecting to produce between 4.8 and 5.0 million ounces of gold at cash costs ranging from $425/oz to $435/oz. In 2007, the company said gold production declined 3% to 5.48 million ounces in 2007, with costs up 16% at $357/oz.

Newmont said its new power plant for operations in Nevada and new mill for the Yanacocha gold mine in Peru will come on stream this quarter. The company has budgeted $1.8 billion to $2 billion in capital expenditures this year, including the Boddington JV with AngloGold.

Newmont is the first of the world's largest gold producers to report quarterly profit. Barrick Gold and AngloGold Ashanti will release their earnings on May 6, which will also be covered by Resource Investor.

Share Price Analysis

Shares in Newmont jumped about 2.6% in electronic trade this morning, before falling back to $43.10, down 75 cents for the day. Newmont shares have dropped more than 10% so far this year.

In comparison to other major producers, Barrick Gold shares slid 4% to $39.17 today, the lowest since Dec. 27. AngloGold Ashanti's shares were last down 51 cents at $35.77. Barrick is off 6% since the start of the year, while AngloGold has lost 16%, largely due to power shortages in South Africa. All trail the 4% gain in the American Stock Exchange's Gold BUGS Index.

June gold closed down $19.60 at $889.40 an ounce on Nymex today. Gold has declined 14% since bullion hit a record high of $1,030.80 an ounce on March 17.