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Barrick's (GOLD) Earnings Beat Estimates in Q2, Revenues Lag

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Barrick Gold Corporation GOLD recorded net earnings (on a reported basis) of $488 million or 27 cents per share in second-quarter 2022, up from $411 million or 23 cents per share in the year-ago quarter.

Barring one-time items, adjusted earnings per share were 24 cents. The figure beat the Zacks Consensus Estimate of 23 cents. Our estimate for the quarter was 28 cents.

Barrick recorded total sales of $2,859 million, down 1% year over year. The figure missed the Zacks Consensus Estimate by 6.81%. Our estimate for the quarter was $3,159 million.

The company witnessed strong performance across the portfolio during the quarter. It, however, faced challenges from higher costs and lower copper prices in the quarter, offset by higher gold realized prices. Barrick saw higher gold cost of sales in the quarter, hurt by increased input prices due to supply chain issues and the Russian-Ukraine conflict.

 

Barrick Gold Corporation Price, Consensus and EPS Surprise

 

Barrick Gold Corporation Price, Consensus and EPS Surprise
Barrick Gold Corporation Price, Consensus and EPS Surprise

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

 

Operational Highlights

Total gold production was 1.04 million ounces in the reported quarter, essentially flat year over year. Production was higher sequentially, driven by stronger performance across Carlin, Turquoise Ridge, Veladero, Bulyanhulu and North Mara. Our estimate for the quarter was 1.11 million ounces.

Average realized price of gold was $1,861 per ounce in the quarter, up around 2% year over year. This compares to our estimate of $1,800 per ounce.

Cost of sales increased around 10% year over year to $1,216 per ounce. Our estimate for the quarter was $1,110 per ounce. All-in sustaining costs (AISC) moved up around 11% year over year to $1,212 per ounce in the quarter. This compares to our estimate of $1,080 per ounce.

Copper production increased 25% year over year to 120 million pounds. Our estimate for the quarter was 115 million pounds. The average realized copper price was $3.72 per pound, down 19% year over year. This compares to our estimate of $4.25 per pound.

Financial Position

At the end of the quarter, Barrick had cash and cash equivalents of $5,780 million, up 12% year over year. The company’s total debt was $5,144 million at the end of the quarter, flat year over year.

Operating cash flow was $924 million for the quarter while free cash flow was $169 million.

The company repurchased $182 million in shares under the $1 billion share buyback program during the quarter.

Guidance

For 2022, Barrick continues to anticipate attributable gold production in the range of 4.2-4.6 million ounces. It expects the fourth quarter to see the strongest production, driven by Cortez, higher grades from Phoenix and Tongon, as well as better underground productivity at Hemlo.

AISC is projected in the range of $1,040-$1,120 per ounce and cash costs per ounce are forecast in the band of $730-$790 per ounce. The company also continues to see cost of sales in the band of $1,070-$1,150 per ounce. It expects to be either at the top end or modestly above the gold cost guidance ranges for the full year factoring in the impact of the Russia-Ukraine war on global energy prices.

The company also expects copper production in the range of 420-470 million pounds at AISC of $2.70-$3.00 per pound and cost of sales of $2.20-$2.50 per pound.

Capital expenditures are projected between $1,900 million and $2,200 million.

Price Performance

Barrick’s shares have dropped 21.1% in the past year compared with a 13.9% decline of the industry.

 

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Zacks Rank & Key Picks

Barrick currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include Cabot Corporation CBT, Sociedad Quimica y Minera de Chile S.A. SQM and Albemarle Corporation ALB.

Cabot, currently carrying a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 22.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 0.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 35% over a year.

Sociedad has a projected earnings growth rate of 513.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 57.8% upward in the past 60 days.

Sociedad’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average being 28.2%. SQM has rallied roughly 88% in a year. The company sports a Zacks Rank #1.

Albemarle has a projected earnings growth rate of 231.4% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 3.6% upward in the past 60 days.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 6% in a year and currently carries a Zacks Rank #1.


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