Barrick's (GOLD) Earnings Beat Estimates in Q3, Revenues Lag
Barrick Gold Corporation GOLD recorded net earnings (on a reported basis) of $241 million or 14 cents per share in third-quarter 2022, down from $347 million or 20 cents per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 13 cents. The figure beat the Zacks Consensus Estimate of 11 cents.
Barrick recorded sales of $2,527 million, down around 11% year over year. The figure missed the Zacks Consensus Estimate of $3,087.9 million.
The company faced challenges from lower gold production and sales, higher costs and lower gold and copper prices in the quarter.
Barrick Gold Corporation Price, Consensus and EPS Surprise
Barrick Gold Corporation price-consensus-eps-surprise-chart | Barrick Gold Corporation Quote
Operational Highlights
Total gold production was 988,000 ounces in the reported quarter, down around 10% year over year and 5% sequentially. Production was lower sequentially as reduced production across Veladero, Carlin and Turquoise Ridge more than offset a strong performance from Pueblo Viejo. Production was also lower sequentially at Long Canyon in the third quarter.
Third-quarter gold sales were 997,000 ounces, down 7% year over year.
Average realized price of gold was $1,722 per ounce in the quarter, down around 3% year over year.
Cost of sales increased around 9% year over year to $1,226 per ounce. The increase was due to higher input prices driven by energy, labor and consumables resulting from supply-chain issues and the Russia-Ukraine conflict.
All-in sustaining costs (AISC) moved up around 23% year over year to $1,269 per ounce in the quarter.
Copper production increased 23% year over year to 123 million pounds. Average realized copper price was $3.24 per pound, down 19% year over year.
Financial Position
At the end of the quarter, Barrick had cash and cash equivalents of $5,240 million, up around 4% year over year. The company’s total debt was $5,095 million at the end of the quarter, down around 1% year over year.
Operating cash flow was $758 million for the quarter. The company generated negative free cash flow of $34 million.
The company repurchased $322 million in shares under the $1 billion share buyback program as of Sep 30, 2022.
Guidance
For 2022, Barrick continues to anticipate attributable gold production to be at the bottom end of its guidance range of 4.2-4.6 million ounces. It expects the fourth quarter to see the strongest production, mainly driven by Cortez and higher open pit grades from Carlin.
The company now expects to exceed the earlier provided gold cost guidance ranges for the full year factoring in the impact of the Russia-Ukraine war on global energy prices and higher year-to-date gold prices. It projected AISC in the range of $1,040-$1,120 per ounce, cash costs per ounce in the band of $730-$790 per ounce and cost of sales in the band of $1,070-$1,150 per ounce for 2022.
The company also continues expects copper production to be at the mid-point of its guidance range of 420-470 million pounds. It also sees copper AISC of $2.70-$3.00 per pound and cost of sales of $2.20-$2.50 per pound.
Capital expenditures are projected between $1,900 million and $2,200 million.
Price Performance
Barrick’s shares have dropped 27.2% in the past year compared with a 16% decline of the industry.
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Zacks Rank & Key Picks
Barrick currently carries a Zacks Rank #5 (Strong Sell).
Better-ranked stocks worth considering in the basic materials space include Sociedad Quimica y Minera de Chile S.A. SQM, Albemarle Corporation ALB and Commercial Metals Company CMC.
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 2.1% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 46% in a year. The company currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 430.9% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 5.8% upward in the past 60 days.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 2% in a year.
Commercial Metals currently carries a Zacks Rank #2. The Zacks Consensus Estimate for CMC's current-year earnings has been revised 3.8% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 31% in a year.
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