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Barrick Gold (ABX) Q1 Earnings In Line, Sales Beat Estimates

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Barrick Gold Corporation recorded net earnings (attributable to equity holders) of $158 million or 14 cents per share for first-quarter 2018 compared with $679 million or 58 cents a year ago.

Barring one-time items, adjusted net earnings came in at 15 cents per share for the quarter, which was in line with the Zacks Consensus Estimate.

Revenues fell roughly 10.2% year over year to $1,790 million in the first quarter. The figure however, beat the Zacks Consensus Estimate of $1,764.9 million.

Cost of sales (applicable to gold production) fell roughly 15.5% year over year to $1,046 million in the quarter.

According to the company, first-quarter results benefited from higher gold prices despite lower production levels compared to the prior-year quarter.

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 1.05 million ounces in the first quarter, down roughly 19.9% from 1.31 million ounces a year ago.

Average realized price of gold rose 19.2% year over year to $1,332 per ounce. All-in sustaining costs (AISC) increased 4.1% to $804 per ounce from $772 in the year-ago quarter.

Copper production decreased to 85 million pounds from 95 million pounds in the prior-year quarter. Average realized copper price was $2.98 per pound, up from $2.76 a year ago.

Financial Position

Cash and cash equivalents were $2,384 million at the end of first quarter, up roughly 4.7% year over year.

At the end of the quarter, Barrick Gold’s debt was $6,344 million, down 16.9% from $7,633 million a year ago. The company plans to reduce its total debt to $5 billion by the end of 2018, using cash flows from operations and cash in hand. Also, more than three quarters of the company’s $6.4 billion of outstanding debt will not mature until 2032.

Guidance

For 2018, Barrick Gold continues to anticipate gold production in the range of 4.5-5 million ounces at AISC of $765-$815 per ounce and cost of sales of $810-$850 per ounce.

The company expects gold production in the second quarter of 2018 to be more or less in line with the first quarter at around 1 million ounces. The results in the second quarter are likely to be impacted from a scheduled maintenance shutdown at the Barrick Nevada roaster.

Price Performance

Barrick Gold’s shares have lost 12.7% in the last three months, underperforming the 7.7% decline recorded by its industry.



Zacks Rank & Stocks to Consider

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

Better-ranked stocks in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , United States Steel Corporation (X - Free Report) and Kronos Worldwide Inc. (KRO - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have soared 25.8% over a year.

U.S. Steel has an expected long-term earnings growth rate of 8%. Its shares have gained 17.4% over the past six months.

Kronos has an expected long-term earnings growth rate of 5%. Its shares have rallied 41% over a year.

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