We're in the midst of the August earnings season and the Newcrest Mining Ltd (ASX: NCM) share price is in focus. Shares in the Aussie gold miner are down 5.4% in 2021 ahead of its results release on Thursday.
Let's take a look at how Newcrest's valuation responded to recent earnings seasons.
How did the Newcrest share price respond last earnings season?
Newcrest reported its half-year earnings on 11 February 2021. Newcrest shares jumped 4.1% higher on that day on the back of the impressive result.
The Aussie miner reported strong operating performance thanks to a bumper gold price in the first half of the year. Underlying profit jumped 98% to US$553 million with earnings per share rocketing 121% higher.
The Newcrest share price climbed higher on the result which was puncuated by an upgraded dividend policy. Newcrest announced it would target a 30-60% payout ratio of free cash flow compared to 10-30% previously.
It wasn't all good news for shareholders, however, with the company's value falling 7.1% lower in the week that followed. The news isn't much better looking back over the past 12 months — shares in the Aussie miner are down 26.4% in that period of time.
The Newcrest share price actually slumped in August 2020 after its last full-year earnings result as well. It would be easy to look at this trend and say that there's a clear relationship between earnings and share price slumps.
However, it's important to remember that Newcrest is a commodity-based company. That means the underlying price of its outputs has a major determination in the Newcrest share price movements.
Foolish takeaway
Gold prices slumped lower in August and September 2020 and there was a similar decline throughout January to March this year. That coincides with both of Newcrest's earnings seasons and is a big factor in its share price moves.
Investors will be hoping the recent gold price surge coincides with a strong earnings result on Thursday morning.
