Barrick Gold Profit Plunges, Yet Tops View

(RTTNews) - Barrick Gold Corp. (ABX, ABX.TO) Wednesday reported a sharp decline in profit for the first quarter, and lowered its copper production forecast for the year, citing processing disruption at Lumwana.

Net income attributable to equity holders of the company plunged to $88 million or $0.08 per share from $847 million or $0.85 per share in the prior-year quarter.

The latest results included $113 million in unrealized foreign currency translation losses, $30 million in demobilization costs related to the ramp-down of Pascua-Lama and $18 million in realized and unrealized gains on non-hedge derivative instruments.

Adjusted net earnings totaled $238 million or $0.20 per share, while it was $923 million or $0.92 per share in the prior year.

On average, 19 analysts polled by Thomson Reuters expected earnings of $0.19 per share. Analysts estimates typically exclude special items.

The company attributed the decrease to the impact of lower metal prices and lower gold sales volumes.

Revenue declined to $2.632 billion from $3.399 billion. Analysts expected revenues of $2.60 billion.

Gold production declined to 1.588 million ounces from 1.797 million ounces. Copper output was 104 million pounds, compared to 127 million pounds last year.

All-in sustaining costs declined to $833 per ounce from $933 per ounce.

Looking ahead to 2014, the company expects copper output in the range of 410 to 440 million pounds, compared to the original guidance of 470 to 500 million pounds, reflecting the processing disruption at Lumwana.

The company maintained its gold production guidance for 2014 of 6 to 6.5 million ounces.

Barrick said it is on track to achieve run rate for targeted $500 million in annual savings by the end of 2014.

Jamie Sokalsky, Barrick's President and CEO, said, "Barrick is a considerably different company today than it was a year ago - leaner, stronger and more financially flexible. Our first quarter all-in sustaining costs of $833 per ounce, $100 per ounce below the prior year quarter, demonstrate that our efforts to reduce costs are delivering tangible results."

ABX closed up 2 percent on Tuesday at $17.67. ABX.TO settled up 1.2 percent at C$19.35.