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Barrick (GOLD) to Post Q1 Earnings: What's in the Cards?

Barrick Gold Corporation GOLD is scheduled to report first-quarter 2021 results before the opening bell on May 5. The company’s results are expected to reflect the benefits of higher year-over-year gold prices.

The gold mining giant surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average being 15.5%. It posted an earnings surprise of 12.9% in the last reported quarter.

The stock is down 20.7% in the past year compared with the industry’s 5.6% decline.

 


 

 

Let’s see how things are shaping up for this announcement.

What Do the Estimates Say?

Earlier this month, Barrick announced preliminary results for first-quarter 2021. The preliminary results for the first quarter reflect sales of 1.09 million ounces of gold and 113 million pounds of copper for the quarter. The company also reported preliminary first-quarter production for gold and copper at 1.1 million ounces as well as 93 million pounds, respectively. The average market price for gold in the first quarter was $1,794 per ounce, while for copper it was $3.86 per pound.

Barrick also expects first-quarter gold cost of sales per ounce to be modestly higher and all-in sustaining costs (AISC) per ounce to be 8-10% higher than the previous quarter. It also expects cost of sales per pound for copper to be 1-3% higher than the fourth quarter and AISC per pound for copper to be 6-8% lower than the prior quarter due to higher sales.

The Zacks Consensus Estimate for first-quarter consolidated revenues for Barrick is currently pegged at $3,055 million, which calls for a rise of 12.3% year over year.

Some Factors to Watch For

The company is expected to have benefited from higher year-over-year gold prices in the first quarter. Gold had a stellar run in 2020 as fears over the coronavirus pandemic made it the most attractive safe-haven asset. Apprehensions regarding the global economic growth fueled safe haven demand for the metal through the year.  The ultra-low interest rate environment and geopolitical tensions also spurred up demand for gold. Moreover, concerns over supply crunch stemming from suspensions of operations by miners per government mandates to curb the virus spread also contributed to the rally in gold prices.

However, the yellow metal lost the momentum this year, largely due to vaccine rollouts and optimism over economic recovery. Notably, gold prices dipped below $1,700 per ounce to the lowest level in nine months in early March 2021 on strengthening U.S. dollar and an uptrend in treasury yields. Despite the decline, Barrick is likely to have benefited from higher averaged realize gold prices on a year-over-year basis in the first quarter. Higher prices are expected to have supported its top line and margins.

However, sequentially lower gold and copper production is likely have affected the company’s performance in the quarter to be reported. Barrick noted that the preliminary first-quarter gold production was sequentially lower than the previous quarter owing to mine sequencing at Carlin and Cortez as well as lower grades at Pueblo Viejo. Lower grades and production from Tongon, were offset by higher grades at Loulo-Gounkoto. Barrick’s preliminary first-quarter copper production was also 22% lower than the prior quarter.

 

Barrick Gold Corporation Price and EPS Surprise

 

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

 

Zacks Model

Our proven model does not conclusively predict an earnings beat for Barrick this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Barrick is 0.00%. The Zacks Consensus Estimate for earnings for the first quarter is currently pegged at 26 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Barrick currently carries a Zacks Rank #3.

Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Westlake Chemical Corporation WLK, scheduled to release earnings on May 4, has an Earnings ESP of +0.64% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

CF Industries Holdings, Inc. CF, scheduled to release earnings on May 5, has an Earnings ESP of +4.53% and carries a Zacks Rank #3.

Nutrien Ltd. NTR scheduled to release earnings on May 3, has an Earnings ESP of +53.84% and carries a Zacks Rank #3.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>


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Westlake Chemical Corporation (WLK): Free Stock Analysis Report
 
CF Industries Holdings, Inc. (CF): Free Stock Analysis Report
 
Barrick Gold Corporation (GOLD): Free Stock Analysis Report
 
Nutrien Ltd. (NTR): Free Stock Analysis Report
 
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