Barrick Gold (ABX) Q2 Earnings Miss, Sales Beat Estimates

Barrick Gold Corporation ABX incurred net loss (attributable to equity holders) of $94 million or 8 cents per share for second-quarter 2018 against net earnings of $1,084 million or 93 cents in the year-ago quarter.

Barring one-time items, adjusted net earnings came in at 7 cents per share, which missed the Zacks Consensus Estimate of 12 cents.

Revenues fell roughly 20.7% year over year to $1,712 million in the reported quarter. The figure beat the Zacks Consensus Estimate of $1,661.1 million.

Barrick Gold Corporation Price, Consensus and EPS Surprise


Barrick Gold Corporation Price, Consensus and EPS Surprise | Barrick Gold Corporation Quote

Operational Highlights

Total gold production was 1.07 million ounces in the second quarter, down roughly 25.5% from 1.43 million ounces a year ago. Per the company, gold production was affected by scheduled maintenance shutdowns at the Pueblo Viejo and Barrick Nevada roaster autoclaves along with lower grade and recovery at the Barrick Nevada oxide mill.

Average realized price of gold rose 4.4% year over year to $1,313 per ounce. Cost of sales (applicable to gold production) went up roughly 21.5% year over year to $882 million. All-in sustaining costs (AISC) increased 20.6% to $856 per ounce from $710 in the year-ago quarter.

Copper production fell to 83 million pounds from 104 million pounds in the prior-year quarter. Average realized copper price was $3.11 per pound, up from $2.60 a year ago.

Financial Position

Cash and cash equivalents were $2,085 million at the end of the second quarter, down roughly 28.7% year over year.

As of Jun 30, 2018, Barrick Gold’s debt was $5,712 million, down 22.1% from $7,328 million a year ago. Notably, the company has lowered total debt by $10 billion over the past five years. Also, it has less than $100 million in debt due before 2020 and more than 85% of company’s outstanding debt will not mature until 2032.


For 2018, Barrick Gold continues to anticipate gold production in the range of 4.5-5 million ounces at AISC of $765-$815 per ounce and cost of sales of $810-$850 per ounce.

The company expects gold production in the third quarter of 2018 to be around 1.2 million ounces. It expects third quarter throughput to be in line with the second-quarter as it completes the two scheduled autoclaves maintenance shutdowns for 2018.

Price Performance

Barrick Gold’s shares have lost 14.1% in the past three months compared with the 4.4% decline recorded by its industry.

Zacks Rank & Stocks to Consider

Barrick Gold currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space are KMG Chemicals, Inc. KMG, Methanex Corporation MEOH and BHP Billiton Limited BHP, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have returned 42% in a year.

Methanex has an expected long-term earnings growth rate of 15%. Its shares have rallied 51.8% in a year.

BHP Billiton has an expected long-term earnings growth rate of 5.3%. Its shares have gained 23% in a year.

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