DENVER – Newmont Mining Corp., one of the world's largest gold producers, said Thursday it turned a profit in the second quarter as it sold more gold at higher prices.

The results were essentially in line with expectations and the stock rose nearly 3 percent in morning trading.

“They just basically benefited from stronger gold prices,” Argus Research analyst Bill Selesky said. “Like everybody else in the industry, they are paying higher costs, nothing unusual there.”

In a research note, JPMorgan analyst John Bridges said he is pleased to see Newmont has been making progress under Chief Executive Richard O'Brien, who took over last year and initiated a comprehensive review of projects.

For the April-June quarter, Newmont reported net income of $277 million, or 61 cents a share.

That compared with a net loss of $2.06 billion, or $4.57 a share, in the second quarter of 2007, when Newmont incurred $2.1 billion in one-time charges on the elimination of its merchant banking business and forward sales contracts.

Revenue rose 19 percent to $1.52 billion from $1.28 billion in the year-ago quarter.

Thomson Financial said analysts who were surveyed expected, on average, earnings of 47 cents a share on revenue of $1.5 billion.

The Denver-based company benefited from a 35 percent increase in the average realized price of gold, from $667 an ounce a year ago to $900 an ounce in the most recent quarter.

It also sold 1.27 million ounces of gold, up slightly from 1.25 million ounces a year ago.

However, rising operations and capital expenditures translated into higher costs applicable to sales, which totaled $440 an ounce compared with $417 in the year-ago quarter.

In the first six months, Newmont had net income of $647 million, or $1.43 a share, compared with a net loss of $1.99 billion, or $4.42 a share a year earlier. Revenue rose to $3.5 billion from $2.5 billion a year ago.

O'Brien credited the improvements to cost-control measures, a new mill at a mine in Peru and the opening of a power plant in Nevada. The 200-megawatt coal-fired power plant, which went into production on May 1, is expected to save up to $80 million in costs.

Newmont's shares rose $1.22, or 2.6 percent, to $48.17 a share in Thursday morning trading.