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The gold mining giant surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.4%. It posted an earnings surprise of 11.8% in the last reported quarter. The company’s third-quarter results are expected to have benefited from sequentially higher gold and copper production and lower costs. However, weaker gold prices are likely to have affected its performance.
The stock is up 6.4% in the past year compared with the industry’s 20.1% 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 third-quarter consolidated revenues for Barrick is currently pegged at $2,998.8 million, which calls for a rise of around 18.7% year over year.
Some Factors to Watch For
Improved gold production is likely have aided the company’s performance in the quarter to be reported. Barrick, earlier this month, said that its preliminary gold production in the third quarter was higher than the second quarter. Production was driven by increased output at Cortez, driven by higher oxide production from the Crossroads open pit and Cortez Hills underground. Planned autoclave maintenance at Turquoise Ridge in the previous quarter and improved grades at Kibali contributed to higher production. This was partly offset by lower production at Carlin. In terms of copper production, the third quarter exceeded the production in the second quarter, primarily driven by the Lumwana mine.
Our estimate for the attributable gold production is pegged at 1,142, 000 ounces for the quarter to be reported, which suggests a 13.2% increase on a sequential basis. The same for copper production is pegged at 119 million pounds, reflecting a sequential increase of 11.2%.
Lower costs are also expected to have supported the company’s margins in the September quarter. The company expects cost of sales for gold for the third quarter to be 2-4% lower than the second quarter and the total cash cost is forecast to be 4-6% lower than the prior quarter. It also expects its all-in sustaining costs per ounce to be up to 6-8% lower than the second quarter.
Meanwhile, after a solid first-quarter performance, gold lost the momentum in the second quarter of 2023, with prices declining roughly 3%. The prospects of more interest rate hikes by the U.S. Federal Reserve this year, higher bond yield and a stronger U.S. dollar weighed on the yellow metal. The yellow metal started the September quarter on an upbeat note aided by a weaker dollar and held its ground at above $1,900 an ounce for much of the quarter. However, gold closed the third quarter below that level as the Federal Reserve signaled that interest rates are likely to remain higher for longer. Gold prices were down nearly 4% for the third quarter.
The impacts of weaker gold prices are expected to reflect on Barrick’s performance in the third quarter. Our estimate for average realized price of gold is $1,924 per ounce for the quarter, reflecting a sequential decline of 2.4%.
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 -2.38%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at 21 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 too have the right combination of elements to post an earnings beat this quarter:
The consensus estimate for AXTA’s earnings for the third quarter is currently pegged at 38 cents.
CF Industries Holdings, Inc. (CF - Free Report) , slated to release earnings on Nov 1, has an Earnings ESP of +4.79% and carries a Zacks Rank #2 at present.
The consensus mark for CF’s third-quarter earnings is currently pegged at 94 cents.
Kinross Gold Corporation (KGC - Free Report) , scheduled to release third-quarter earnings on Nov 8, has an Earnings ESP of +2.96%.
The Zacks Consensus Estimate for Kinross' earnings for the third quarter is currently pegged at 10 cents. KGC currently carries a Zacks Rank #3.
Image: Bigstock
Barrick (GOLD) to Report Q3 Earnings: What's in the Cards?
Barrick Gold Corporation (GOLD - Free Report) is scheduled to report third-quarter 2023 results before the opening bell on Nov 2.
The gold mining giant surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.4%. It posted an earnings surprise of 11.8% in the last reported quarter. The company’s third-quarter results are expected to have benefited from sequentially higher gold and copper production and lower costs. However, weaker gold prices are likely to have affected its performance.
The stock is up 6.4% in the past year compared with the industry’s 20.1% 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 third-quarter consolidated revenues for Barrick is currently pegged at $2,998.8 million, which calls for a rise of around 18.7% year over year.
Some Factors to Watch For
Improved gold production is likely have aided the company’s performance in the quarter to be reported. Barrick, earlier this month, said that its preliminary gold production in the third quarter was higher than the second quarter. Production was driven by increased output at Cortez, driven by higher oxide production from the Crossroads open pit and Cortez Hills underground. Planned autoclave maintenance at Turquoise Ridge in the previous quarter and improved grades at Kibali contributed to higher production. This was partly offset by lower production at Carlin. In terms of copper production, the third quarter exceeded the production in the second quarter, primarily driven by the Lumwana mine.
Our estimate for the attributable gold production is pegged at 1,142, 000 ounces for the quarter to be reported, which suggests a 13.2% increase on a sequential basis. The same for copper production is pegged at 119 million pounds, reflecting a sequential increase of 11.2%.
Lower costs are also expected to have supported the company’s margins in the September quarter. The company expects cost of sales for gold for the third quarter to be 2-4% lower than the second quarter and the total cash cost is forecast to be 4-6% lower than the prior quarter. It also expects its all-in sustaining costs per ounce to be up to 6-8% lower than the second quarter.
Meanwhile, after a solid first-quarter performance, gold lost the momentum in the second quarter of 2023, with prices declining roughly 3%. The prospects of more interest rate hikes by the U.S. Federal Reserve this year, higher bond yield and a stronger U.S. dollar weighed on the yellow metal. The yellow metal started the September quarter on an upbeat note aided by a weaker dollar and held its ground at above $1,900 an ounce for much of the quarter. However, gold closed the third quarter below that level as the Federal Reserve signaled that interest rates are likely to remain higher for longer. Gold prices were down nearly 4% for the third quarter.
The impacts of weaker gold prices are expected to reflect on Barrick’s performance in the third quarter. Our estimate for average realized price of gold is $1,924 per ounce for the quarter, reflecting a sequential decline of 2.4%.
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 -2.38%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at 21 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 too have the right combination of elements to post an earnings beat this quarter:
Axalta Coating Systems Ltd. (AXTA - Free Report) , scheduled to release earnings on Nov 1, has an Earnings ESP of +5.39% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for AXTA’s earnings for the third quarter is currently pegged at 38 cents.
CF Industries Holdings, Inc. (CF - Free Report) , slated to release earnings on Nov 1, has an Earnings ESP of +4.79% and carries a Zacks Rank #2 at present.
The consensus mark for CF’s third-quarter earnings is currently pegged at 94 cents.
Kinross Gold Corporation (KGC - Free Report) , scheduled to release third-quarter earnings on Nov 8, has an Earnings ESP of +2.96%.
The Zacks Consensus Estimate for Kinross' earnings for the third quarter is currently pegged at 10 cents. KGC currently carries a Zacks Rank #3.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.