Barrick's (GOLD) Earnings and Sales Surpass Estimates in Q2

Zacks Equity Research

August 11, 2020 at 11:22 AM·4 min read

Barrick Gold Corporation GOLD recorded net earnings (on a reported basis) of $357 million or 20 cents per share in second-quarter 2020, up from $194 million or 11 cents in the year-ago quarter.

Barring one-time items, adjusted earnings per share increased 155.6% year over year to 23 cents. The figure also beat the Zacks Consensus Estimate of 19 cents.

Barrick recorded total sales of $3,055 million, up 48.1% year over year. The figure topped the Zacks Consensus Estimate of $2,656.5 million.

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 amounted to around 1.15 million ounces in the second quarter, down 15.1% year over year from 1.35 million ounces. Average realized price of gold was $1,725 per ounce in the quarter, up 31% year over year.

Cost of sales moved up 12% year over year to $1,075 per ounce. All-in sustaining costs (AISC) rose 19% year over year to $1,031 per ounce in the quarter.

Copper production increased 24% year over year to 120 million pounds. Average realized copper price was $2.79 per pound, up 6% year over year.

Financial Position

At the end of the second quarter, Barrick had cash and cash equivalents of $3,743 million, up 74% year over year. The company’s total debt was $5,168 million at the end of the quarter, down 11% year over year.

Net cash provided by operating activities surged 137.6% year over year to $1,031 million.

Guidance

For 2020, Barrick continues to anticipate attributable gold production in the range of 4.6-5 million ounces. AISC is expected in the range of $920-$970 per ounce, unchanged from the prior view. Cost of sales is expected in the range of $980-$1,030 per ounce, unchanged from the previous guidance.

The company continues to expect copper production in the range of 440-500 million pounds at AISC of $2.20-$2.50 per pound and cost of sales of $2.10-$2.40 per pound.

Capital expenditures are projected between $1,600 million and $1,900 million.

Price Performance

Barrick’s shares have gained 59.8% in the past year compared with the industry’s 52.7% rally.

Zacks Rank & Other Key Picks

Barrick currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space include Harmony Gold Mining Company Limited HMY, Eldorado Gold Corporation EGO and Golden Star Resources Ltd. GSS, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Harmony Gold has an expected earnings growth rate of 528.6% for fiscal 2020. The company’s shares have surged 110.3% in the past year.

Eldorado Gold has an expected earnings growth rate of 2,225% for 2020. Its shares have returned 43.8% in the past year.

Golden Star Resources has an expected earnings growth rate of 6.3% for 2020. The company’s shares have surged 60.8% in the past year.

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