Barrick Gold’s 2Q16 Earnings and Updated Guidance


Aug. 2 2016, Updated 7:56 a.m. ET

2Q16 results

Barrick Gold (ABX) reported its 2Q16 results after the Market closed on July 27, 2016, and held a call with analysts to discuss the results on July 28. It reported adjusted EPS (earnings per share) of $0.14, which was slightly lower than the consensus estimate of $0.15. While Barrick Gold reported a solid cost performance, slightly lower production offset that benefit. On the back of a strong cost performance YTD (year-to-date), Barrick Gold reduced its cost guidance for 2016. It also reduced its capital expenditure guidance but maintained its production expectation for the year. Barrick Gold continued on its journey toward debt and cost reduction.

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Price performance

Following a slight miss in Barrick Gold’s earnings, its share price fell slightly by 0.4%. In comparison, the VanEck Vectors Gold Miners ETF (GDX) was flat over the previous day.

Barrick Gold’s stock price has risen 174% YTD, as of July 28, 2016. ABX has outperformed its peers Kinross Gold (KGC), Newmont Mining (NEM), Yamana Gold (AUY), and Goldcorp (GG), which have risen 174%, 131%, 206%, and 50% respectively, as of July 28.

Series overview

In this series, we’ll discuss how Barrick Gold’s future prospects are looking based on its recent 2Q16 earnings and management’s comments. We’ll look at the company’s production and cost performances as well as the reasons behind the company’s improved cost guidance. Barrick Gold has shown significant improvement in its debt and cost performance over the last few quarters. We’ll see if this is sustainable.

We’ll also discuss Barrick Gold’s recent developments with regard to its asset sales and progress toward debt reduction. We’ll do this in an effort to interpret how the company’s management is trying to position itself within the context of this volatile gold price environment.

Continue to the next part of this series for a look at Barrick Gold’s production in 2016.


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