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Barrick (GOLD) Q4 Earnings in Line, Revenues Miss Estimates

Zacks Equity Research

Barrick Gold Corporation GOLD reported net loss (attributable to equity holders) of $1,197 million or $1.02 per share for fourth-quarter 2018, wider than net loss of $314 million or 27 cents in the year-ago quarter. The bottom line in the reported quarter was hurt by impairment charges.

Barring one-time items, adjusted earnings came in at 6 cents per share that were in line with the Zacks Consensus Estimate.

Barrick recorded revenues of $1,904 million, down roughly 14.5% year over year. The figure trailed the Zacks Consensus Estimate of $1,937.9 million.

2018 Highlights

For 2018, the company reported net loss of $1,545 million or $1.32, against net income of $1,438 million or $1.23 a year ago.

Per the company, results were affected by impairment charges related to the Veladero and Lagunas Norte mines along with significant tax adjustments. Moreover, earnings were negatively impacted by lower throughput at Acacia, lower tonnage processed at Lagunas Norte and higher government imposts at Veladero. Nevertheless, this was partly offset by lower income tax expenses and depreciation.

Revenues declined 13.5% year over year to $7,243 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 1.26 million ounces in the fourth quarter, down roughly 5.8% year over year. Average realized price of gold fell 4.5% year over year to $1,223 per ounce.

Cost of sales per ounce went up roughly 22.3% year over year to $980 million. All-in sustaining costs (AISC) rose 4.2% to $788 per ounce in the quarter.

Copper production increased to 109 million pounds from 99 million pounds in the prior-year quarter. Average realized copper price was $2.76 per pound, down from $3.34 in the year-ago quarter.

Financial Position

As of Dec 31, 2018, the company had cash and cash equivalents of $1,571 million, down roughly 29.7% year over year.

In 2018, the company reduced long-term debt by 10.5% year over year to $5,695 million. Also, more than 85% of its outstanding debt is due after 2032.  

Guidance

For 2019, Barrick anticipates gold production of 5.1-5.6 million ounces at AISC of $870-$920 per ounce and cost of sales of $880-$940 per ounce.

The company expects copper production in the range of 375-430 million pounds at AISC of $2.40-$2.90 per pound and at cost of sales of $2.30-$2.70 per pound.  

Capital expenditure is projected between $1,400 million and $1,700 million.

Price Performance

Barrick’s shares have gained 28.5% in the past six months compared with the industry’s 17.5% rise.



Zacks Rank & Stocks to Consider

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

A few better-ranked stocks in the basic materials space include Kirkland Lake Gold Ltd. KL, The Mosaic Company MOS and Silver Standard Resources Inc. SSRM. While Kirkland currently sports a Zacks Rank #1 (Strong Buy), Mosaic and Silver Standard Resources carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kirkland has an expected earnings growth rate of 20.9% for 2019. The company’s shares have surged 113.4% in the past year.

Mosaic has an expected earnings growth rate of 23.5% for 2019. Its shares have rallied 23.9% in a year’s time.

Silver Standard Resources has an expected earnings growth rate of 29.2% for 2019. Its shares have surged 53.4% in a year’s time.

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