Barrick Gold Corp. (ABX, ABX.TO) reported Wednesday a decline in first-quarter profit as revenues were hurt by lower gold and copper sales volume and prices. Adjusted earnings per share declined, yet topped analysts' estimates, while revenues missed their view. Further, the Canadian gold producer backed its fiscal 2013 gold and copper production forecast.
Barrick's President and CEO Jamie Sokalsky said, "Our high quality portfolio of mines combined with our sharp focus on cost management has translated into strong quarterly financial and operating results. It is very rewarding to see that our cost reduction efforts have begun to take effect ..."
Barrick Gold's first-quarter net earnings attributable to equity holders declined to $847 million or $0.85 per share from last year's $1.04 billion or $1.04 per share. The prior year results have been restated to reflect the impact of the adoption of new accounting pronouncements.
Adjusted net earnings, which excluded certain items, amounted to $923 million or $0.92 per share, lower than last year's $1.10 billion or $1.10 per share. On average, 17 analysts polled by Thomson Reuters expected earnings of $0.91 per share for the quarter. Analysts' estimates typically exclude one-time items.
The company attributed the decrease in earnings to lower realized gold and copper prices, lower gold and copper sales volumes and higher cost of sales applicable to gold and copper, partially offset by lower income tax expense.
Revenue dropped to $3.44 billion from $3.64 billion in the year-ago quarter, while analysts were looking for revenues of $3.56 billion.
In the quarter, gold production declined to 1.80 million ounces from 1.88 million ounces last year. Gold sold also dropped to 1.75 million ounces from 1.78 million ounces a year earlier. Average realized gold price was $1,629, lower than last year's $1,691.
Copper production increased to 127 millions of pounds from 117 millions of pounds last year. Meanwhile, copper sold as well as average realized copper price declined.
Looking ahead for fiscal 2013, Barrick Gold reaffirmed its gold production guidance of 7 million ounces to 7.4 million ounces at total cash costs of $610 to $660 per ounce. Full-year all-in sustaining cost guidance has been reduced to $950 to $1,050 per ounce from the previous guidance of $1,000 to $1,100 per ounce.
Of the anticipated gold production, North America is projected to generate 3.55 million ounces to 3.70 million ounces.
Further, the company continues to expect 2013 copper production to be 480 million pounds to 540 million pounds.
Barrick recalibrated long-term gold production to a higher quality, more profitable target of eight million ounces by 2016.
Sokalsky added, "While we remain positive on the long-term fundamentals for gold and copper, we don't rely on higher metal prices to be the only driver of shareholder returns."
In pre-market activity, Barrick Gold shares are currently trading at $17.98, up $0.39 or 2.22 percent.
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