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The gold mining giant surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 20.5%. It posted an earnings surprise of 28.6% in the last reported quarter. The company’s first-quarter results are expected to have benefited from higher gold prices. However, sequentially lower gold production and higher costs are likely to have affected its performance.
The stock is down 8.8% in the past year compared with the industry’s 0.5% rise.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What Do the Estimates Say?
The Zacks Consensus Estimate for first-quarter consolidated revenues for Barrick is currently pegged at $2,932 million, which calls for a rise of around 10.9% year over year.
Some Factors to Watch For
Lower gold production is likely have affected the company’s performance in the quarter to be reported. Barrick, earlier this month, said that its preliminary gold production in the first quarter was lower than the fourth quarter of 2023. Production declined mostly due to mine sequencing at many locations and planned maintenance at Nevada Gold Mines. In terms of copper production, preliminary first-quarter production was also lower sequentially due to lower grades mined at Lumwana in compliance with the mine plan.
Our estimate for the attributable gold production is pegged at 963,000 ounces for the quarter to be reported, which suggests an 8.6% decline on a sequential basis.
The company’s performance in the March quarter is also likely to have been impacted by higher costs. GOLD expects decreased gold production to result in 4-6% higher gold cost of sales per ounce in the first quarter, along with 6-8% higher total cash costs per ounce and 7-9% higher all-in sustaining costs per ounce compared to fourth-quarter 2023.
Meanwhile, Gold delivered an annual return of roughly 15% in 2023. Prices were supported by safe-haven demand from the banking crisis and the geopolitical instability notwithstanding record-high interest rates. Notably, gold prices surpassed $2,100 per ounce for the first time in December 2023 on expectations of U.S. monetary policy easing and a weak U.S. dollar. Prices were also driven by the Israel-Hamas conflict, which boosted the demand for safe-haven assets.
The momentum continues this year with prices hitting record highs during the first quarter, crossing the $2,200 per ounce mark in March. The rally has been driven by strong demand from central banks, a dovish Fed interest rate outlook, global uncertainties and a surge in safe-haven demand triggered by geopolitical tensions. Prices of the yellow metal eventually racked up a roughly 8% gain for the first quarter of 2024.
The impacts of higher gold prices are expected to reflect on Barrick’s performance in the first quarter. Our estimate for average realized price of gold is $1,979 per ounce for the quarter, reflecting a year-over-year increase of 4.1%.
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 -3.75%. The Zacks Consensus Estimate for the first quarter is currently pegged at 16 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 they have the right combination of elements to post an earnings beat this quarter:
The consensus estimate for IOSP’s earnings for the first quarter is currently pegged at $1.64.
Kinross Gold Corporation (KGC - Free Report) , slated to release earnings on May 7, has an Earnings ESP of +4.49% and carries a Zacks Rank #3 at present.
The consensus mark for KGC’s first-quarter earnings is currently pegged at 6 cents.
Ingevity Corporation (NGVT - Free Report) , scheduled to release first-quarter earnings on May 1, has an Earnings ESP of +39.29%.
The Zacks Consensus Estimate for NGVT's earnings for the first quarter is currently pegged at 37 cents. NGVT currently carries a Zacks Rank #1.
Image: Bigstock
Will Lower Production Weigh on Barrick's (GOLD) Q1 Earnings?
Barrick Gold Corporation (GOLD - Free Report) is scheduled to report first-quarter 2024 results before the opening bell on May 1.
The gold mining giant surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 20.5%. It posted an earnings surprise of 28.6% in the last reported quarter. The company’s first-quarter results are expected to have benefited from higher gold prices. However, sequentially lower gold production and higher costs are likely to have affected its performance.
The stock is down 8.8% in the past year compared with the industry’s 0.5% rise.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What Do the Estimates Say?
The Zacks Consensus Estimate for first-quarter consolidated revenues for Barrick is currently pegged at $2,932 million, which calls for a rise of around 10.9% year over year.
Some Factors to Watch For
Lower gold production is likely have affected the company’s performance in the quarter to be reported. Barrick, earlier this month, said that its preliminary gold production in the first quarter was lower than the fourth quarter of 2023. Production declined mostly due to mine sequencing at many locations and planned maintenance at Nevada Gold Mines. In terms of copper production, preliminary first-quarter production was also lower sequentially due to lower grades mined at Lumwana in compliance with the mine plan.
Our estimate for the attributable gold production is pegged at 963,000 ounces for the quarter to be reported, which suggests an 8.6% decline on a sequential basis.
The company’s performance in the March quarter is also likely to have been impacted by higher costs. GOLD expects decreased gold production to result in 4-6% higher gold cost of sales per ounce in the first quarter, along with 6-8% higher total cash costs per ounce and 7-9% higher all-in sustaining costs per ounce compared to fourth-quarter 2023.
Meanwhile, Gold delivered an annual return of roughly 15% in 2023. Prices were supported by safe-haven demand from the banking crisis and the geopolitical instability notwithstanding record-high interest rates. Notably, gold prices surpassed $2,100 per ounce for the first time in December 2023 on expectations of U.S. monetary policy easing and a weak U.S. dollar. Prices were also driven by the Israel-Hamas conflict, which boosted the demand for safe-haven assets.
The momentum continues this year with prices hitting record highs during the first quarter, crossing the $2,200 per ounce mark in March. The rally has been driven by strong demand from central banks, a dovish Fed interest rate outlook, global uncertainties and a surge in safe-haven demand triggered by geopolitical tensions. Prices of the yellow metal eventually racked up a roughly 8% gain for the first quarter of 2024.
The impacts of higher gold prices are expected to reflect on Barrick’s performance in the first quarter. Our estimate for average realized price of gold is $1,979 per ounce for the quarter, reflecting a year-over-year increase of 4.1%.
Barrick Gold Corporation Price and EPS Surprise
Barrick Gold Corporation price-eps-surprise | Barrick Gold Corporation Quote
Zacks Model
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 -3.75%. The Zacks Consensus Estimate for the first quarter is currently pegged at 16 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 they have the right combination of elements to post an earnings beat this quarter:
Innospec Inc. (IOSP - Free Report) , scheduled to release earnings on May 9, has an Earnings ESP of +2.44% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for IOSP’s earnings for the first quarter is currently pegged at $1.64.
Kinross Gold Corporation (KGC - Free Report) , slated to release earnings on May 7, has an Earnings ESP of +4.49% and carries a Zacks Rank #3 at present.
The consensus mark for KGC’s first-quarter earnings is currently pegged at 6 cents.
Ingevity Corporation (NGVT - Free Report) , scheduled to release first-quarter earnings on May 1, has an Earnings ESP of +39.29%.
The Zacks Consensus Estimate for NGVT's earnings for the first quarter is currently pegged at 37 cents. NGVT currently carries a Zacks Rank #1.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.