Barrick Gold (ABX) Q3 Earnings Miss, Revenues Beat Estimates

Barrick Gold Corporation (NYSE:ABX) recorded net loss (attributable to equity holders) of $11 million or a penny per share for third-quarter 2017, as against net earnings of $175 million or 15 cents a year ago. The year-over-year decline was due to lower gold prices and production and the impact of Tanzania's concentrate export ban on Acacia.

Barring one-time items, adjusted net earnings were $186 million or 16 cents per share for the quarter. Earnings per share however, missed the Zacks Consensus Estimate of 17 cents.

Revenues fell roughly 13.2% year over year to $1,993 million in the reported quarter. The figure however, topped the Zacks Consensus Estimate of $1,965 million.

Cost of sales fell roughly 1.6% year over year to $1,270 million in the reported quarter.

Operational Highlights

Total gold production was 1.243 million ounces in the reported quarter, down roughly 10% from 1.381 million ounces a year ago.

Average realized price of gold fell to $1,274 per ounce in the reported quarter from the year-ago quarter figure of $1,333. All-in sustaining costs (AISC) increased to $772 per ounce in the reported quarter from $704 a year ago.

Copper production increased to 115 million pounds in the reported quarter from 100 million pounds in the prior-year quarter. Average realized copper price was $3.05 per pound, up from $2.18 per pound a year ago.

Financial Position

Cash and cash equivalents were $2,025 million at the end of the third quarter, down roughly 23.5% year over year.

Barrick Gold reduced total debt by roughly $1.5 billion year to date, and exceeded the initial target to reduce debt by $1.45 billion for 2017. During the quarter, the company completed redemption of roughly $731 million of May 2023 notes and also repaid the outstanding amounts as per the Pueblo Viejo project financing agreement. The company plans to reduce its total debt to $5 billion by the end of 2018, using portfolio optimizing and cash flows from operations. Also, three-quarters of the company’s $6.4 billion of outstanding debt will not mature until 2032.

Guidance

For 2017, Barrick Gold has narrowed its gold production and cost estimates.

The company now anticipates full-year gold production in the range of 5.3-5.5 million ounces, at AISC of $740-$770 per ounce and cost of sales of $790-$810 per ounce.

The company now expects full year copper production in the band of 420-440 million pounds, at AISC of $2.20-2.40 per pound and cost of sales of $1.70-$1.85 per pound.

Price Performance

Barrick Gold’sshares have declined 14% in the last three months, underperforming the 1.8% dip recorded by its industry.

Zacks Rank & Key Picks

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

Some better-ranked stocks in the basic materials space are Huntsman Corporation (NYSE:HUN) , FMC Corporation (NYSE:FMC) and Westlake Chemical Corporation (NYSE:WLK) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Huntsman has an expected long-term earnings growth rate of 7%.

FMC has an expected long-term earnings growth rate of 11.3%.

Westlake Chemical has an expected long-term earnings growth rate of 8.3%.

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