Some of the major producers of gold are beginning to reflect profits that correlate to the current high gold prices. Some analysts believe this is a sign of a gold mining company merger and acquisition stage that will last for the long term. There are some great stocks to invest in when it comes to major gold mining companies.
In the final quarter of 2009, Barrick Gold, Kinross Gold, and Newmont reported excellent profits. Barrick earned a hefty $215 million during fourth quarter 2009. This is quite an impressive turnaround from the $468 million loss it reported in 2008. The company’s adjusted profits rose from $277 million in 2008 to a record of $604 million at the end of the year 2009.
Kinross Gold also had a fourth quarter 2008 loss but managed to turn this into a 2009 fourth quarter profit. The company revenue jumped 44 percent in the last quarter of 2009. During the same period, the earnings per share more than doubled. This impressive performance exceeded the consensus estimates from major analysts.
Newmont also experienced a skyrocket effect with its fourth quarter 2009 profits. From fourth quarter 2008 to the same period in 2009, company earnings went from $4 to $558 million. This equates to a leap from one penny per share to $1.13 per share in the company stock price. Quite an impressive accomplishment given the volatile fluctuations occurring in the present economy.
Analysts foresee no end in sight for this trend, considering that the major mining companies will be able to sell gold bullion for prices exceeding $1,100 per ounce over the next two to three years. Every time gold bullion prices increase $100, a company producing eight million ounces of gold per year like Barrick does will increase its profit margin by almost $800 million annually. Some of this money will likely be used to purchase junior gold mining companies.