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Barrick Gold (ABX) Q2 Earnings Meet Estimates, Sales Miss
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Barrick Gold’s second-quarter 2016 adjusted earnings per share (excluding one-time items) of 14 cents were in line with the Zacks Consensus Estimate. Earnings also surged 180% from the year-ago quarter figure of 5 cents per share.
On a reported basis, earnings for the second quarter came in at $138 million or 12 cents per share as against a loss of $9 million or a penny per share in the prior-year quarter.
Revenues fell around 9.8% year over year to $2,012 million in the reported quarter and missed the Zacks Consensus Estimate of $2,036 million.
Average realized price of gold rose 5.8% year over year to $1,259 per ounce in the quarter. All-in costs declined 13.2% to $849 per ounce and all-in sustaining costs (AISC) fell roughly 12.6% to $782 per ounce in the reported quarter.
Gold
Total gold production declined to 1,340 million ounces in second-quarter 2016 from 1,445 million ounces a year ago.
The Goldstrike mine in the North American region produced 263,000 ounces of gold in the quarter, up 27.7% year over year, at an average AISC of $737 per ounce (relatively flat year over year).
The Cortez mine produced 248,000 ounces of gold in the quarter, up 28.5% year over year, at an average AISC of $558 per ounce, down 31.2%.
Production at Pueblo Viejo rose 14.5% to 150,000 ounces. Average AISC declined 7% to $634 per ounce.
Copper
Copper production decreased to 103 million pounds from 115 million pounds in the prior-year quarter. C1 cash cost was $1.52 per pound in the quarter, down from $1.94 per pound in the year-ago quarter.
Financial Position
Cash and cash equivalents were $2,441 million as of Jun 30, 2016, up roughly 15% from $2,122 million as of Jun 30, 2015. Long-term debt was roughly $8,825 million, down from around $12,361 million a year ago.
Barrick generated $274 million in free cash flow in the reported quarter.
Debt Reduction
The company has reduced its total debt by $968 million so far this year, representing nearly half of its debt reduction target for the year.
In 2016, Barrick plans to reduce its total debt by at least $2 billion by drawing on its existing cash balance, delivering free cash flow from operations, selling additional non-core assets, and creating new joint ventures and partnerships.
Guidance
For 2016, Barrick reiterated its gold production outlook and expects to produce 5–5.5 million ounces of gold at lower AISC of $750–$790 per ounce. The company has raised its copper production outlook to the range of 380−430 million pounds. The increased production guidance is due to commercial production having started at Jabal Sayid. On completion of its underground development in the second half of 2017, the mine is expected to produce 100 million pounds of copper annually.
The company reiterated its copper AISC cost guidance for 2016 in the range of $1.95–$2.25 per pound. The guidance takes into consideration the revision of royalty changes set by the Zambian government.
Some other well-ranked mining companies include AngloGold Ashanti Ltd. (AU - Free Report) , B2Gold Corp. (BTG - Free Report) and Franco-Nevada Corporation (FNV - Free Report) , all sporting a Zacks Rank #1 (Strong Buy).
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Barrick Gold (ABX) Q2 Earnings Meet Estimates, Sales Miss
Barrick Gold’s second-quarter 2016 adjusted earnings per share (excluding one-time items) of 14 cents were in line with the Zacks Consensus Estimate. Earnings also surged 180% from the year-ago quarter figure of 5 cents per share.
On a reported basis, earnings for the second quarter came in at $138 million or 12 cents per share as against a loss of $9 million or a penny per share in the prior-year quarter.
Revenues fell around 9.8% year over year to $2,012 million in the reported quarter and missed the Zacks Consensus Estimate of $2,036 million.
Average realized price of gold rose 5.8% year over year to $1,259 per ounce in the quarter. All-in costs declined 13.2% to $849 per ounce and all-in sustaining costs (AISC) fell roughly 12.6% to $782 per ounce in the reported quarter.
Gold
Total gold production declined to 1,340 million ounces in second-quarter 2016 from 1,445 million ounces a year ago.
The Goldstrike mine in the North American region produced 263,000 ounces of gold in the quarter, up 27.7% year over year, at an average AISC of $737 per ounce (relatively flat year over year).
The Cortez mine produced 248,000 ounces of gold in the quarter, up 28.5% year over year, at an average AISC of $558 per ounce, down 31.2%.
Production at Pueblo Viejo rose 14.5% to 150,000 ounces. Average AISC declined 7% to $634 per ounce.
Copper
Copper production decreased to 103 million pounds from 115 million pounds in the prior-year quarter. C1 cash cost was $1.52 per pound in the quarter, down from $1.94 per pound in the year-ago quarter.
Financial Position
Cash and cash equivalents were $2,441 million as of Jun 30, 2016, up roughly 15% from $2,122 million as of Jun 30, 2015. Long-term debt was roughly $8,825 million, down from around $12,361 million a year ago.
Barrick generated $274 million in free cash flow in the reported quarter.
Debt Reduction
The company has reduced its total debt by $968 million so far this year, representing nearly half of its debt reduction target for the year.
In 2016, Barrick plans to reduce its total debt by at least $2 billion by drawing on its existing cash balance, delivering free cash flow from operations, selling additional non-core assets, and creating new joint ventures and partnerships.
Guidance
For 2016, Barrick reiterated its gold production outlook and expects to produce 5–5.5 million ounces of gold at lower AISC of $750–$790 per ounce. The company has raised its copper production outlook to the range of 380−430 million pounds. The increased production guidance is due to commercial production having started at Jabal Sayid. On completion of its underground development in the second half of 2017, the mine is expected to produce 100 million pounds of copper annually.
The company reiterated its copper AISC cost guidance for 2016 in the range of $1.95–$2.25 per pound. The guidance takes into consideration the revision of royalty changes set by the Zambian government.
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Zacks Rank
Currently, Barrick carries a Zacks Rank #2 (Buy).
Some other well-ranked mining companies include AngloGold Ashanti Ltd. (AU - Free Report) , B2Gold Corp. (BTG - Free Report) and Franco-Nevada Corporation (FNV - Free Report) , all sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>