Barrick Gold Q2 Profit Beats Expectations

Barrick Gold Corporation (ABX), one of the world’s largest gold producers, beat earnings estimates in the second quarter of 2021 thanks to higher gold prices.

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Revenue came in at $2.89 billion for the quarter ended June 30, a decrease of 5% from $3.06 billion in the prior-year quarter. It missed estimates of $2.92 billion.

Meanwhile, net earnings amounted to $411 million ($0.23 per share), up 15.1% from a profit of $357 million ($0.20 per share) a year ago. (See Barrick Gold Corporation stock charts on TipRanks)

On an adjusted basis, Barrick earned $513 million ($0.29 per share) in Q2 2021, compared to a profit of $415 million ($0.23 per share) in Q2 2020. Analysts expected adjusted EPS of $0.26.

The average realized gold prices for the second quarter were $1,820 per ounce, up nearly 2.5% from a year ago. However, Barrick produced 1.041 million ounces of gold between April and June, down more than 5% from last year. The company said production declined to due milling issues.

All-in sustaining costs increased 5.4% to $ 1,087 per ounce of gold in the quarter.

Barrick Gold’s president and chief executive officer Mark Bristow said, “The gold mining industry’s chronic tendency to harvest the gold price instead of investing in the future has resulted in declining reserves and a shortage of high-quality development projects.

“At Barrick, on the other hand, a strong exploration culture combined with its sustainable profitability strategy is expanding its asset base as we look to discover exciting new opportunities.”

The Toronto-based gold miner said it was on track to meet annual forecasts despite the production drop.

Yesterday, Bank of America analyst Michael Jalonen maintained a Buy rating on ABX, with a price target of C$36.45. This implies 41% upside potential.

Overall, consensus on the Street is that ABX is a Strong Buy based on seven Buys. The average Barrick Gold price target of C$37.48 implies 45% upside potential to current levels. Shares have plunged by nearly 20% year-to-date.