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Barrick Gold's (ABX) Q3 Earnings and Revenues Beat Estimates
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Barrick Gold’s third-quarter 2016 adjusted earnings per share (excluding one-time items) of 24 cents beat the Zacks Consensus Estimate of 19 cents. Earnings soared around 118.2% from the year-ago quarter figure of 11 cents per share. The results were supported by higher gold prices and lower operating costs.
On a reported basis, earnings for the third quarter came in at $175 million or 15 cents per share as against a loss of $264 million or 23 cents per share in the prior-year quarter.
Revenues dipped 0.8% year over year to $2,297 million in the reported quarter, but surpassed the Zacks Consensus Estimate of $2,197 million. Average realized price of gold rose 18.5% year over year to $1,333 per ounce in the quarter. All-in sustaining costs (AISC) declined roughly 8.7% to $704 per ounce in the reported quarter.
Shares of the company rose 1.2% to close at $16.85 on Oct 27.
Gold
Total gold production declined to 1.38 million ounces in third-quarter 2016 from 1.66 million ounces a year ago.
The Goldstrike mine in the North American region produced 293,000 ounces of gold in the quarter, down 10.7% year over year. The cost of sales was $805 per ounce, rising 12.1% year over year.
The Cortez mine produced 254,000 ounces of gold in the quarter, down 20.9% year over year. The cost of sales was up 27.8% year over year to $874 per ounce.
Production at Pueblo Viejo rose 9.9% to 189,000 ounces. The cost of sales was down 39% year over year to $521 per ounce.
Copper
Copper production decreased to 100 million pounds from 140 million pounds in the prior-year quarter. Average realized copper price was $2.18 per pound in the quarter, at par with the year-ago quarter.
Financial Position
Cash and cash equivalents were $2,648 million as of Sep 30, 2016, falling roughly 20.2% from $3,317 million as of Sep 30, 2015.
Debt Reduction
During the reported quarter, Barrick reduced its total debt by $461 million. It has completed more than $1.4 billion in debt repayments year to date, representing over 70% of its debt reduction goal for the year. The company now has less than $200 million in debt due before 2019, and roughly $5 billion of its outstanding debt of $8.5 billion will not mature until after 2032.
The company expects to achieve its 2016 debt reduction target using existing cash balances and operating cash flows for the fourth quarter. Over the medium term, the company plans to cut its total debt to below $5 billion.
Guidance
For 2016, Barrick anticipates gold production to be in the range of 5.25–5.55 million ounces, up from its original estimate of 5–5.50 million ounces. Cost of sales applicable to gold is predicted to be in the range of $800-$850 per ounce. The company reduced its all-in sustaining cost guidance for 2016 to $740–$775 per ounce, below its original 2016 guidance of $775–$825 per ounce.
Capital expenditures for 2016 are expected to be in the range of $1.20–$1.30 billion, down from the company’s original 2016 guidance range of $1.35–$1.65 billion.
Newmont has an expected earnings growth rate of 82.8% for the current year.
Pershing Gold has an expected earnings growth rate of 26.3% for the current year.
Eldorado Gold has an expected earnings growth rate of 120% for the current year.
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Barrick Gold's (ABX) Q3 Earnings and Revenues Beat Estimates
Barrick Gold’s third-quarter 2016 adjusted earnings per share (excluding one-time items) of 24 cents beat the Zacks Consensus Estimate of 19 cents. Earnings soared around 118.2% from the year-ago quarter figure of 11 cents per share. The results were supported by higher gold prices and lower operating costs.
On a reported basis, earnings for the third quarter came in at $175 million or 15 cents per share as against a loss of $264 million or 23 cents per share in the prior-year quarter.
Revenues dipped 0.8% year over year to $2,297 million in the reported quarter, but surpassed the Zacks Consensus Estimate of $2,197 million.
Average realized price of gold rose 18.5% year over year to $1,333 per ounce in the quarter. All-in sustaining costs (AISC) declined roughly 8.7% to $704 per ounce in the reported quarter.
Shares of the company rose 1.2% to close at $16.85 on Oct 27.
Gold
Total gold production declined to 1.38 million ounces in third-quarter 2016 from 1.66 million ounces a year ago.
The Goldstrike mine in the North American region produced 293,000 ounces of gold in the quarter, down 10.7% year over year. The cost of sales was $805 per ounce, rising 12.1% year over year.
The Cortez mine produced 254,000 ounces of gold in the quarter, down 20.9% year over year. The cost of sales was up 27.8% year over year to $874 per ounce.
Production at Pueblo Viejo rose 9.9% to 189,000 ounces. The cost of sales was down 39% year over year to $521 per ounce.
Copper
Copper production decreased to 100 million pounds from 140 million pounds in the prior-year quarter. Average realized copper price was $2.18 per pound in the quarter, at par with the year-ago quarter.
Financial Position
Cash and cash equivalents were $2,648 million as of Sep 30, 2016, falling roughly 20.2% from $3,317 million as of Sep 30, 2015.
Debt Reduction
During the reported quarter, Barrick reduced its total debt by $461 million. It has completed more than $1.4 billion in debt repayments year to date, representing over 70% of its debt reduction goal for the year. The company now has less than $200 million in debt due before 2019, and roughly $5 billion of its outstanding debt of $8.5 billion will not mature until after 2032.
The company expects to achieve its 2016 debt reduction target using existing cash balances and operating cash flows for the fourth quarter. Over the medium term, the company plans to cut its total debt to below $5 billion.
Guidance
For 2016, Barrick anticipates gold production to be in the range of 5.25–5.55 million ounces, up from its original estimate of 5–5.50 million ounces. Cost of sales applicable to gold is predicted to be in the range of $800-$850 per ounce. The company reduced its all-in sustaining cost guidance for 2016 to $740–$775 per ounce, below its original 2016 guidance of $775–$825 per ounce.
Capital expenditures for 2016 are expected to be in the range of $1.20–$1.30 billion, down from the company’s original 2016 guidance range of $1.35–$1.65 billion.
BARRICK GOLD CP Price, Consensus and EPS Surprise
BARRICK GOLD CP Price, Consensus and EPS Surprise | BARRICK GOLD CP Quote
Zacks Rank
Currently, Barrick carries a Zacks Rank #3 (Hold).
Some better-ranked companies in the mining space include Newmont Mining Company (NEM - Free Report) , Pershing Gold Corporation and Eldorado Gold Corporation (EGO - Free Report) , all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Newmont has an expected earnings growth rate of 82.8% for the current year.
Pershing Gold has an expected earnings growth rate of 26.3% for the current year.
Eldorado Gold has an expected earnings growth rate of 120% for the current year.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>