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Barrick Gold Rises on Solid Q2 Performance

Story Highlights

Operational efficiency helped Barrick navigate the company through the various challenges that roiled the second quarter of 2022. 

Shares of Barrick Gold (GOLD), one of the world’s largest gold and copper producers, rose 3% early Monday after it reported solid second-quarter results. Although the company’s earnings and revenues surpassed consensus estimates, the metrics declined year-over-year.

Adjusted earnings per share (EPS) stood at $0.24 in the quarter, above the consensus expectation of $0.22. Barrick Gold had posted earnings of $0.29 per share in the same quarter last year.

The company had no luck with revenues either, which fell 1% year-over-year and remained flat on a sequential basis. Yet, these declines were not surprising, given the cost inflation and supply chain headwinds.

Highlights of Barrick Gold’s Q2 Earnings

The production of gold increased sequentially, hitting 1.04 million ounces. This growth was primarily led by Carlin and Turquoise Ridge gold mines in Nevada, the Veladero mine in Argentina, and Bulyanhulu and North Mara in Tanzania.

Importantly, the company expects gold production to increase in the second half of the year.

Meanwhile, 120 million pounds of copper were produced in the second quarter, up from 96 pounds in the prior-year quarter.

Management enforced that Barrick was “on track to achieve 2022 production targets.”

Cost of sales spiked 10% year-over-year to $1,216 per ounce of gold as a result of inflation, and fell 13% year-over-year to $2.11 per pound of copper.

GOLD’s Financial Position

At the end of the quarter, Barrick’s cash and cash equivalents of $5,780 million suggested a 2% decline from the first quarter. The company’s total debt remained steady at $5,144 million as of June 30.

However, net cash provided by operating activities surged 45% year-over-year to $924 million for the quarter.

Share Repurchases & Dividends

Along with its second-quarter earnings results, Barrick declared a dividend of $0.20 per share, which will be paid on September 15 to shareholders of record as of August 31.

The CFO of Barrick, Graham Shuttleworth, said, “On the back of our strong operating performance, we are once again able to provide a leading dividend yield to our shareholders, whilst still maintaining a strong balance sheet.”

Is Barrick a Good Stock to Buy?

As of now, analysts have mixed feelings about the stock. On TipRanks, Barrick Gold carries a Moderate Buy consensus rating, which is based on four Buys and three Holds. GOLD’s average price forecast of $24.11 mirrors upside potential of almost 55%.

Concluding Thoughts

In the second quarter, Barrick has shown impressive strength, becoming one of the few big names to deliver an estimate beat and effectively run production despite supply-chain issues and high operating costs.

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