Why Is Barrick Gold (GOLD) Down 10.8% Since Last Earnings Report?

It has been about a month since the last earnings report for Barrick Gold (GOLD). Shares have lost about 10.8% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Barrick Gold due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Barrick's Earnings and Sales Surpass Estimates in Q4

Barrick recorded net earnings (on a reported basis) of $1,387 million or 78 cents per share in fourth-quarter 2019 against a net loss of $1,197 million or $1.02 per share in the year-ago quarter.

Barring one-time items, adjusted earnings per share (EPS) rose 183.3% year over year to 17 cents. The figure also beat the Zacks Consensus Estimate of 14 cents.

Barrick recorded total sales of $2,883 million, up 51.4% year over year. The figure also surpassed the Zacks Consensus Estimate of $2,858.9 million.

2019 Highlights

For 2019, the company reported profits of $3,969 million or $2.26 per share against a net loss of $1,545 million or $1.32 a year ago.

Revenues rose 34.2% year over year to $9,717 million in 2019.

Operational Highlights

Total gold production were 1.44 million ounces in the fourth quarter, up 14% year over year from 1.26 million ounces. Average realized price of gold was $1,483 per ounce in the quarter, up 21.3% from $1,223 per ounce in the year-ago quarter.

Cost of sales went up 6.7% year over year to $1,046 per ounce. All-in sustaining costs rose 17.1% year over year to $923 per ounce in the quarter.

Copper production increased 7.3% year over year to 117 million pounds. Average realized copper price was $2.76 per pound, flat year over year.

Financial Position

At the end of 2019, Barrick had cash and cash equivalents of $3,314 million, up 110.9% year over year. As of Dec 31, 2019, the company’s total debt was roughly $5.5 billion compared with $5.7 billion as of Dec 31, 2018.

Net cash provided by operating activities rose 60.5% year over year to $2.8 billion for full-year 2019.

The company’s board also announced a 40% dividend hike for fourth-quarter 2019 to 7 cents per share. It is payable on Mar 16, 2020 to shareholders of record at the close of business as of Feb 28, 2020.

Guidance

For 2020, the company anticipates attributable gold production in the range of 4.8-5.2 million ounces at AISC of $920-$970 per ounce. Cost of sales is expected in the range of $980-$1,030 per ounce.

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

Capital expenditure is projected between $1,600 million and $1,900 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 6.13% due to these changes.

VGM Scores

At this time, Barrick Gold has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Barrick Gold has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.