Barrick Gold (ABX) Plunges 9.3% on Dismal Earnings Report

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By jturbin | November 2, 2012 4:18 AM EST

Gold Alert

Barrick Gold (ABX), the world’s largest gold mining company, fell as much as $3.76, or 9.3%, to $36.74 per share on Thursday after delivering very disappointing third quarter earnings results.

The Canadian-based gold miner reported earnings per share (EPS) of $0.62, although when adjusted for various one-time items the figure came in at $0.85.  Nonetheless, Barrick’s adjusted EPS was well below the $0.99 consensus estimate among Wall Street analysts.

(For several analysts’ comments on Barrick’s earnings, as well as price target and rating changes, visit GoldAlert Pro at

On the production side, the Company announced quarterly gold ounces of 1.78 million – which also missed the forecasts of most analysts.  Moreover, Barrick Gold reduced the high-end of its full-year production guidance from 7.8 to 7.5 million ounces and raised its cash cost estimate to $575-$585 from $550-$575 per ounce.

Many research analysts also raised concerns about Barrick’s Pascua Lama gold project – located on the border of Chile and Argentina – after the Company raised its capital expenditures estimate on the project to $8.0-$8.5 billion from $7.5-$8.0 billion and delayed the start of production to the second half of 2014 from mid-2014.

GMP Securities analyst George Albino noted that the Pascua Lama capex increase was particularly worrisome because Barrick had already increased its original capex forecast for the project by 50% earlier this year.

The sell-off in shares of ABX had a significant impact on the Market Vectors Gold Miners ETF (GDX), of which it is the largest component.  While several other widely-traded gold stocks moved higher this afternoon – including Agnico-Eagle Mines (AEM) and Goldcorp (GG) – the GDX nonetheless remained lower by $0.66, or 1.3%, at $52.24 per share.

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This article is contributed by Gold Alert and does not represent the views or opinions of International Business Times.

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