Investment Q&A

EPS of 35c beat estimates of 29c; revenue of $3.13B beat estimates of $3.06B. EBITDA of $1.83B beat estimates by 10%. Barrick's gold production may rise over the next three quarters on improving output at the Nevada Gold Mine joint venture, Pueblo Vieja and Kibali, after scheduled maintenance disrupted 1Q, putting the middle end of guidance for 3.15-3.55 million ounces within reach. Total cash costs could average toward the top end, or even slightly above, the company's forecast of $1,050-$1,130 per ounce, due to a stronger-than-expected price environment. Still, consensus Ebitda may be too conservative by $800 million, should gold hold at $3,350 an ounce, we calculate. Strong operating cash flows and $900 million in proceeds from the sale of a stake in Donlin could flip net debt into a net cash position of over $600 million by year-end, even as share buybacks accelerate, which may prompt a dividend top-up in 3Q. The stock remains very cheap at 10X earnings, but has lagged some of the other faster-growing peers such as AEM.