A month has gone by since the last earnings report for Barrick Gold (GOLD). Shares have added about 3.7% in that time frame, outperforming 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 Earnings Beat Estimates in Q4, Sales Lag
Barrick recorded net earnings (on a reported basis) of $726 million or 41 cents per share in fourth-quarter 2021, up from $685 million or 39 cents per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 35 cents. The figure beat the Zacks Consensus Estimate of 30 cents.
Barrick recorded total sales of $3,310 million, up 0.9% year over year. The figure missed the Zacks Consensus Estimate of $3,424.4 million. Results in the reported quarter were hurt by lower gold prices.
Operational Highlights
Total gold production amounted to around 1.2 million ounces in the fourth quarter, flat year over year. Nevada Gold Mines attained the highest quarterly production since its formation. The average realized price of gold was $1,793 per ounce in the quarter, down 4.2% year over year.
Cost of sales increased 0.9% year over year to $1,075 per ounce. All-in sustaining costs (AISC) moved up around 4.5% year over year to $971 per ounce in the quarter.
Copper production increased 5.9% year over year to 126 million pounds. The average realized copper price was $4.63 per pound, up 36.6% year over year.
FY21 Results
Earnings (as reported) for full-year 2021 were $1.14 per share compared with earnings of $1.31 per share a year ago. Net sales declined 5% year over year to around $11,985 million.
Financial Position
At the end of the quarter, Barrick had cash and cash equivalents of $5,280 million, up 1.8% year over year. The company’s total debt was $5,176 million at the end of the quarter, down 0.1% year over year.
Net cash provided by operating activities declined 15.3% year over year to $1,387 million for the quarter.
The company’s board authorized a share repurchase program allowing it to repurchase of up to $1 billion of its outstanding common shares over the next 12 months. Its board also declared a dividend of 10 cents per share for the fourth quarter of 2021, calling for an increase of 11% on the previous base quarterly dividend of 9 cents.
Guidance
For 2022, Barrick anticipates attributable gold production in the range of 4.2-4.6 million ounces. AISC is expected in the range of $1,040-$1,120 per ounce and cash costs per ounce are projected in the band of $730-$790 per ounce.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -11.01% due to these changes.
VGM Scores
At this time, Barrick Gold has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. 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 C. 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 these revisions 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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