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Barrick (ABX) Surpasses Earnings & Revenue Estimates in Q3

Barrick Gold CorporationABX posted net loss (attributable to equity holders) of $412 million or 35 cents per share for third-quarter 2018, wider than net loss of $11 million or a penny per share a year ago.

Barring one-time items, adjusted net earnings came in at 8 cents per share, down from 17 cents a year ago. It, however, beat the Zacks Consensus Estimate of 6 cents.

Per the company, lower adjusted net earnings in the third quarter reflect lower realized prices of gold and copper along with higher direct mining costs, stemming from increased fuel consumption and prices as well as planned maintenance activities at Pueblo Viejo.

Revenues fell roughly 7.8% year over year to $1,837 million in the quarter. Nevertheless, the figure beat the Zacks Consensus Estimate of $1,809.3 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 around 1.15 million ounces in the third quarter, down roughly 7.6% from around 1.24 million ounces in the year-ago quarter.

Average realized price of gold fell 4.6% year over year to $1,216 per ounce. Cost of sales (applicable to gold production) went up roughly 3.7% year over year to $850 million. All-in sustaining costs (AISC) inched up 1.7% to $785 per ounce from $772 in the year-ago quarter.

Copper production declined to 106 million pounds from 115 million pounds in the prior-year quarter. Average realized copper price was $2.76 per pound, down from $3.05 in the year-ago quarter.

Financial Position

Cash and cash equivalents were $1,697 million at the end of the third quarter, down roughly 16.2% year over year.

As of Sep 30, 2018, Barrick's debt was $5,696 million, down 10.5% from $6,364 million as of Dec 31, 2017. Notably, the company has lowered total debt by $10 billion in the past five years. Also, it has less than $100 million in debt due before 2020. More than 85% of the company's outstanding debt will not mature until after 2032.

Guidance

For 2018, Barrick anticipates gold production to be at the bottom end of its guidance 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 fourth quarter to be around 1.25 million ounces.

Price Performance

Barrick Gold's shares have gained 10.9% in the past three months against the industry 's 8.2% decline.

Zacks Rank & Stocks to Consider

Barrick Gold currently carries a Zacks Rank #4 (Sell).

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

Methanex has expected long-term earnings growth rate of 15%. Its shares have rallied 27.7% in the past year.

KMG Chemicals has expected long-term earnings growth rate of 28.5%. Its shares have rallied 35.8% in the past year.

CF Industries has expected long-term earnings growth rate of 6%. Its shares have gained 18.2% in a year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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