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The gold mining giant surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 14.5%. It posted an earnings surprise of 27.3% in the last reported quarter. The company’s second-quarter results are expected to have benefited from sequentially higher gold and copper production and lower costs. Weaker gold and copper prices are likely to have affected its performance.
The stock is up 1.8% in the past year compared with the industry’s 13.1% 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 second-quarter consolidated revenues for Barrick is currently pegged at $3,397 million, which calls for a rise of around 18.8% year over year.
Some Factors to Watch For
Increased gold production is likely have aided the company’s performance in the quarter to be reported. Barrick, last month, said that its preliminary gold production in the second quarter was higher than the first quarter. Production was driven by higher production at the Carlin mine, where normal throughput levels were restored after significant maintenance work conducted in the first four months of the year. Additionally, higher grades at the Kibali and Veladero mines contributed to the overall increase. In terms of copper production, the second quarter exceeded the production in the first quarter, primarily driven by the Lumwana mine.
Our estimate for the attributable gold production is pegged at 1,074, 000 ounces for the quarter to be reported, which suggests a 12.8% increase on a sequential basis. The same for copper production is pegged at 118 million pounds, reflecting a sequential increase of 34%.
Lower costs are also expected to have supported the company’s margins in the quarter. The company expects cost of sales for gold for the second quarter to be 3-5% lower than the first quarter. The total cash cost is forecast to be 1-3% lower than the prior quarter. GOLD also expects its all-in sustaining costs per ounce to be up to 2% lower than the first quarter.
Meanwhile, gold prices lost steam in February 2023 following a solid performance in January, as strong U.S. economic data propelled yields and the U.S. dollar higher. Prices, nevertheless, rebounded strongly in March, driven by the fall in the value of the U.S. dollar after the sudden collapse of Silicon Valley Bank that led skittish investors flock to safe-haven assets. Gold gained on speculation that the banking crisis will trigger less-aggressive Federal Reserve rate hikes. Prices of the yellow metal were up nearly 8% in the first quarter. However, gold lost the momentum in the second quarter with prices declining roughly 3% for the quarter. The prospects of more interest rate hikes by the U.S. Federal Reserve this year weighed on the yellow metal.
Moreover, copper prices had started this year on a strong note, fueled by investor expectations of a surge in demand after the reopening of the China economy from the COVID-led restrictions. However, softer demand from China and global economic concerns weighed on copper prices during the second quarter.
The impacts of sequentially weaker gold and copper prices are expected to reflect on Barrick’s performance in the second quarter.
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 -2.28%. The Zacks Consensus Estimate for earnings for the second quarter is currently pegged at 17 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:
The consensus estimate for CMP’s earnings for the fiscal third quarter is currently pegged at a loss of 16 cents.
Pan American Silver Corp. (PAAS - Free Report) , slated to release earnings on Aug 9, has an Earnings ESP of +4.62% and carries a Zacks Rank #3 at present.
The consensus mark for PAAS’ second-quarter earnings is currently pegged at 8 cents.
IAMGOLD Corporation (IAG - Free Report) , scheduled to release earnings on Aug 10, has an Earnings ESP of +16.67%.
The Zacks Consensus Estimate for IAG's earnings for the second quarter is currently pegged at a loss of 2 cents. IAG currently carries a Zacks Rank #3.
Image: Bigstock
Barrick (GOLD) to Report Q2 Earnings: What's in the Offing?
Barrick Gold Corporation (GOLD - Free Report) is scheduled to report second-quarter 2023 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 14.5%. It posted an earnings surprise of 27.3% in the last reported quarter. The company’s second-quarter results are expected to have benefited from sequentially higher gold and copper production and lower costs. Weaker gold and copper prices are likely to have affected its performance.
The stock is up 1.8% in the past year compared with the industry’s 13.1% 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 second-quarter consolidated revenues for Barrick is currently pegged at $3,397 million, which calls for a rise of around 18.8% year over year.
Some Factors to Watch For
Increased gold production is likely have aided the company’s performance in the quarter to be reported. Barrick, last month, said that its preliminary gold production in the second quarter was higher than the first quarter. Production was driven by higher production at the Carlin mine, where normal throughput levels were restored after significant maintenance work conducted in the first four months of the year. Additionally, higher grades at the Kibali and Veladero mines contributed to the overall increase. In terms of copper production, the second quarter exceeded the production in the first quarter, primarily driven by the Lumwana mine.
Our estimate for the attributable gold production is pegged at 1,074, 000 ounces for the quarter to be reported, which suggests a 12.8% increase on a sequential basis. The same for copper production is pegged at 118 million pounds, reflecting a sequential increase of 34%.
Lower costs are also expected to have supported the company’s margins in the quarter. The company expects cost of sales for gold for the second quarter to be 3-5% lower than the first quarter. The total cash cost is forecast to be 1-3% lower than the prior quarter. GOLD also expects its all-in sustaining costs per ounce to be up to 2% lower than the first quarter.
Meanwhile, gold prices lost steam in February 2023 following a solid performance in January, as strong U.S. economic data propelled yields and the U.S. dollar higher. Prices, nevertheless, rebounded strongly in March, driven by the fall in the value of the U.S. dollar after the sudden collapse of Silicon Valley Bank that led skittish investors flock to safe-haven assets. Gold gained on speculation that the banking crisis will trigger less-aggressive Federal Reserve rate hikes. Prices of the yellow metal were up nearly 8% in the first quarter. However, gold lost the momentum in the second quarter with prices declining roughly 3% for the quarter. The prospects of more interest rate hikes by the U.S. Federal Reserve this year weighed on the yellow metal.
Moreover, copper prices had started this year on a strong note, fueled by investor expectations of a surge in demand after the reopening of the China economy from the COVID-led restrictions. However, softer demand from China and global economic concerns weighed on copper prices during the second quarter.
The impacts of sequentially weaker gold and copper prices are expected to reflect on Barrick’s performance in the second quarter.
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 -2.28%. The Zacks Consensus Estimate for earnings for the second quarter is currently pegged at 17 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:
Compass Minerals International, Inc. (CMP - Free Report) , scheduled to release earnings on Aug 8, has an Earnings ESP of +30.16% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks Rank #1 stocks here.
The consensus estimate for CMP’s earnings for the fiscal third quarter is currently pegged at a loss of 16 cents.
Pan American Silver Corp. (PAAS - Free Report) , slated to release earnings on Aug 9, has an Earnings ESP of +4.62% and carries a Zacks Rank #3 at present.
The consensus mark for PAAS’ second-quarter earnings is currently pegged at 8 cents.
IAMGOLD Corporation (IAG - Free Report) , scheduled to release earnings on Aug 10, has an Earnings ESP of +16.67%.
The Zacks Consensus Estimate for IAG's earnings for the second quarter is currently pegged at a loss of 2 cents. IAG currently carries a Zacks Rank #3.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.