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Barrick (GOLD) to Post Q3 Earnings: What's in the Offing?

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Barrick Gold Corporation (GOLD - Free Report) is set to release third-quarter 2019 results on Nov 6, before the opening bell. The company’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average being 8.3%. While operational restrictions on the Tanzania mine are likely to have impacted gold production in the third quarter, the company is expected to have benefited from higher gold prices.

The stock has rallied 35.8% in the past year compared with the industry’s 59.6% surge.



What to Expect in Q3    

Earlier this month, the company announced preliminary production results for third-quarter 2019.

Preliminary gold sales and production in the to-be-reported quarter were 1.32 million ounces and 1.31 million ounces, respectively. Average market price for gold was $1,472 per ounce. Preliminary copper production totaled 111 million pounds. Average market price for copper was $2.63 per pound in the second quarter.

The company stated that preliminary third-quarter results include the impact of the Nevada Gold Mines joint venture, which was established on Jul 1, 2019.

Preliminary gold production and sales figures were slightly lower from second-quarter levels. This downside was caused by operational restrictions on Tanzania-based North Mara during the third quarter. Notably, the restrictions were lifted by quarter-end.  

Barrick expects third-quarter gold cost of sales per ounce to increase 11-13% sequentially. Higher cost per ounce is expected to have been caused by higher depreciation from purchase price adjustments at Nevada Gold Mines.

Also, higher production at Lumwana led to a sequential increase in copper production in the third quarter, per the company.

Meanwhile, benefit of higher gold prices is expected to show on Barrick’s third-quarter margins. Gold has had a stellar run in 2019. Uncertainties related to the U.S.-China trade standoff and geopolitical tensions have triggered demand for gold so far this year. Higher prices have likely had a positive impact on the company’s third-quarter earnings.

The Zacks Consensus Estimate for third-quarter total revenues is currently pegged at $2,620 million, which indicates 42.6% increase year over year.

What the Zacks Model Says

Our proven model doesn’t conclusively predict an earnings beat for Barrick this time around. 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: Barrick has an Earnings ESP of -3.22%. The Zacks Consensus Estimate is currently pegged at 10 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.

Barrick Gold Corporation Price and EPS Surprise

 

Barrick Gold Corporation Price and EPS Surprise

Barrick Gold Corporation price-eps-surprise | Barrick Gold Corporation Quote

 

Stocks Poised to Beat Estimates

Here are some companies in the basic materials space you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Franco-Nevada Corporation (FNV - Free Report) has an Earnings ESP of +0.34% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross Gold Corporation (KGC - Free Report) has an Earnings ESP of +2.50% and flaunts a Zacks Rank #1.

Arconic Inc (ARNC - Free Report) has an Earnings ESP of +1.42% and carries a Zacks Rank #3.

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