It has been about a month since the last earnings report for Barrick Gold (GOLD). Shares have added about 0.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Barrick Gold due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Barrick’s Q2 Earnings Surpass Estimates, Sales Lag
Barrick recorded net earnings (on a reported basis) of $411 million or 23 cents per share in second-quarter 2021, up from $357 million or 20 cents per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 29 cents. The figure beat the Zacks Consensus Estimate of 26 cents.
Barrick recorded total sales of $2,893 million, down 5% year over year. The figure missed the Zacks Consensus Estimate of $2,967.3 million.
Operational Highlights
Total gold production amounted to around 1.04 million ounces in the second quarter, down 9% year over year from 1.15 million ounces. Average realized price of gold was $1,820 per ounce in the quarter, up 6% year over year.
Cost of sales increased 3% year over year to $1,107 per ounce. AISC moved up around 5% year over year to $1,087 per ounce in the quarter.
Copper production declined 20% year over year to 96 million pounds. Average realized copper price was $4.57 per pound, up 64% year over year.
Financial Position
At the end of the quarter, Barrick had cash and cash equivalents of $5,138 million, up 37% year over year. The company’s total debt was $5,152 million at the end of the quarter, down 0.3% year over year.
Net cash provided by operating activities declined 38% year over year to $639 million for the quarter.
Guidance
For 2021, Barrick anticipates attributable gold production in the range of 4.4-4.7 million ounces. AISC is expected in the range of $970-$1,020 per ounce and cost of sales is projected in the band of $1,020-$1,070 per ounce.
The company also expects copper production in the range of 410-460 million pounds at AISC of $2.00-$2.20 per pound and cost of sales of $1.90-$2.10 per pound.
Capital expenditures are projected between $1,800 million and $2,100 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Barrick Gold has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Barrick Gold has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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