A month has gone by since the last earnings report for Barrick Gold Corporation . Shares have lost about 7.8% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Barrick Beats on Q4 Earnings & Sales
Barrick swung to a profit in the fourth quarter of 2016, helped by its cost-reduction actions. The company logged a profit of $425 million or $0.36 per share in the reported quarter. In the year-ago quarter, the company had incurred a loss of $2.6 billion or $2.25 per share.
Barring one-time items, adjusted earnings were $0.22 per share for the quarter, beating the Zacks Consensus Estimate of $0.21. Adjusted earnings also rose from the year-ago quarter figure of $0.08 per share. The results were supported by higher gold prices and lower cost of sales.
Revenues rose roughly 4% year over year to $2,319 million in the reported quarter, surpassing the Zacks Consensus Estimate of $2,204 million.
Cost of sales fell roughly 18% year over year in the quarter.
Operational Highlights
Total gold production declined to 1.52 million ounces in the reported quarter from 1.62 million ounces a year ago. Average realized price of gold rose 10% year over year to $1,217 per ounce in the fourth quarter. All-in sustaining costs declined modestly to $732 per ounce in the reported quarter from $733 per ounce a year ago.
Copper production decreased to 101 million pounds in the quarter from 138 million pounds in the prior-year quarter. Average realized copper price was $2.62 per pound in the quarter, up from $2.16 per pound a year ago.
Financial Position
Cash and cash equivalents were $2,389 million at the end of 2016, down roughly 3% year over year. The company generated healthy free cash flow of around $1.5 billion in 2016.
Barrick reduced its total debt by $2.04 billion or 20% during 2016, surpassing its $2 billion debt reduction target for the year. The company plans to reduce its total debt by $2.9 billion to $5 billion by the end of 2018, half of which have been targeted in 2017.
Guidance
For 2017, Barrick anticipates gold production to be in the range of 5.60-5.90 million ounces. Cost of sales applicable to gold has been forecast to be in the range of $780-$820 per ounce for the year. The company sees all-in sustaining cost of $720-$770 per ounce for 2017.
For 2018, Barrick expects to produce 4.80-5.30 million ounces of gold. Moreover, it expects to produce 4.60-5.10 million ounces of gold in 2019.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
VGM Scores
At this time, Barrick Gold's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Barrick Gold (ABX) Down 7.8% Since the Last Earnings Report?
A month has gone by since the last earnings report for Barrick Gold Corporation . Shares have lost about 7.8% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Barrick Beats on Q4 Earnings & Sales
Barrick swung to a profit in the fourth quarter of 2016, helped by its cost-reduction actions. The company logged a profit of $425 million or $0.36 per share in the reported quarter. In the year-ago quarter, the company had incurred a loss of $2.6 billion or $2.25 per share.
Barring one-time items, adjusted earnings were $0.22 per share for the quarter, beating the Zacks Consensus Estimate of $0.21. Adjusted earnings also rose from the year-ago quarter figure of $0.08 per share. The results were supported by higher gold prices and lower cost of sales.
Revenues rose roughly 4% year over year to $2,319 million in the reported quarter, surpassing the Zacks Consensus Estimate of $2,204 million.
Cost of sales fell roughly 18% year over year in the quarter.
Operational Highlights
Total gold production declined to 1.52 million ounces in the reported quarter from 1.62 million ounces a year ago. Average realized price of gold rose 10% year over year to $1,217 per ounce in the fourth quarter. All-in sustaining costs declined modestly to $732 per ounce in the reported quarter from $733 per ounce a year ago.
Copper production decreased to 101 million pounds in the quarter from 138 million pounds in the prior-year quarter. Average realized copper price was $2.62 per pound in the quarter, up from $2.16 per pound a year ago.
Financial Position
Cash and cash equivalents were $2,389 million at the end of 2016, down roughly 3% year over year. The company generated healthy free cash flow of around $1.5 billion in 2016.
Barrick reduced its total debt by $2.04 billion or 20% during 2016, surpassing its $2 billion debt reduction target for the year. The company plans to reduce its total debt by $2.9 billion to $5 billion by the end of 2018, half of which have been targeted in 2017.
Guidance
For 2017, Barrick anticipates gold production to be in the range of 5.60-5.90 million ounces. Cost of sales applicable to gold has been forecast to be in the range of $780-$820 per ounce for the year. The company sees all-in sustaining cost of $720-$770 per ounce for 2017.
For 2018, Barrick expects to produce 4.80-5.30 million ounces of gold. Moreover, it expects to produce 4.60-5.10 million ounces of gold in 2019.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
Barrick Gold Corporation Price and Consensus
Barrick Gold Corporation Price and Consensus | Barrick Gold Corporation Quote
VGM Scores
At this time, Barrick Gold's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.