Barrick (GOLD) to Report Q2 Earnings: What's in the Cards?
Barrick Gold Corporation GOLD is scheduled to report second-quarter 2022 results before the opening bell on Aug 8.
The gold mining giant surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 11.4%. It posted an earnings surprise of 13% in the last reported quarter. The company’s results are expected to reflect the benefits of higher realized gold prices and higher sequential gold and copper production.
The stock is down 25.9% in the past year compared with the industry’s 20.7% decline.
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Let’s see how things are shaping up for this announcement.
What Do the Estimates Say?
Barrick, last month, announced preliminary results for the second quarter. It reported preliminary second-quarter sales of 1.04 million ounces of gold and 113 million pounds of copper. It also announced preliminary second-quarter production of 1.04 million ounces of gold and 120 million pounds of copper. The average market price for gold in the second quarter was $1,871 per ounce and $4.32 per pound for copper. However, the closing price at the end of the quarter was $3.83 per pound. Barrick’s second-quarter realized copper price is projected to be 13-15% lower than the average second-quarter market price for copper.
All-in sustaining costs (AISC) per ounce for gold are projected to be 3-5% higher than first-quarter levels. Gold cost of sales per ounce is forecast to be 1-3% higher sequentially. Total cash costs per ounce for gold are projected to be 2-4% higher.
The Zacks Consensus Estimate for second-quarter consolidated revenues for Barrick is currently pegged at $3,068 million, which calls for a rise of around 6.1% year over year. Our estimate for the quarter is $3,159 million.
Some Factors to Watch For
Higher sequential gold and copper production is likely have supported the company’s performance in the quarter to be reported. Preliminary gold production in the second quarter was higher than the previous quarter’s level of 990,000 ounces. Production was higher on stronger performance across the portfolio, especially at Carlin, Turquoise Ridge, Veladero, Bulyanhulu and North Mara. The preliminary copper production was also higher than the first quarter, driven by Lumwana.
Meanwhile, gold prices lost the momentum in the June quarter. Gold rallied roughly 8% in the first quarter, thanks to rapidly rising inflation, higher interest rates and uncertainties surrounding the Russia-Ukraine conflict. Amid the economic uncertainties, weakness in equity markets and increased volatility, gold stood out as an effective hedge. However, gold prices erased the gains and closed the second quarter roughly 7% lower. A key reason behind the downswing in prices was the sharp rally in the U.S. dollar.
Nevertheless, higher year-over-year realized gold prices are expected to have aided Barrick’s performance in the June quarter. Notably, the average market price for gold for the second quarter, as reported by the company, reflects an increase from $1,820 per ounce it had recorded in the year-ago quarter.
Barrick Gold Corporation Price and EPS Surprise
Barrick Gold Corporation price-eps-surprise | Barrick Gold Corporation Quote
Our proven model does not conclusively predict an earnings beat for Barrick this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Barrick is -2.83%. The Zacks Consensus Estimate for earnings for the second quarter is currently pegged at 23 cents. Our estimate for the quarter is 28 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Barrick currently carries a Zacks Rank #3.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Maverix Metals Inc. MMX, expected to release earnings on Aug 11, has an Earnings ESP of +9.09% and sports a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Maverix Metals’ second-quarter earnings has been revised 33.3% upward in the past 60 days. The Zacks Consensus Estimate for MMX’s earnings for the quarter is pegged at 4 cents.
Sandstorm Gold Ltd. SAND, scheduled to release earnings on Aug 11, has an Earnings ESP of +7.14% and carries a Zacks Rank #3.
The Zacks Consensus Estimate for Sandstorm Gold’s second-quarter earnings has been revised 25% upward in the past 60 days. The consensus estimate for SAND’s earnings for the quarter is currently pegged at 5 cents.
Sierra Metals Inc. SMTS, scheduled to release earnings on Aug 11, has an Earnings ESP of +50.00%.
The Zacks Consensus Estimate for Sierra Metals' earnings for the second quarter is currently pegged at 2 cents. SMTS currently carries a Zacks Rank #3.
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