Barrick Gold & Goldcorp Mixed Thursday Morning: One Beats, The Other Misses

Barrick Gold ABX, Goldcorp GG diverge in Thursday morning trading, as Barrick Gold reported Q2 EPS results that beat analyst consensus estimates, whereas Goldcorp reported results that missed analyst consensus estimates.
Barrick Gold reported (adjusted) Q2 EPS of $0.14 versus consensus estimates of $0.17 missing analyst consensus EPS estimates of $0.14. Barrick Gold also reported revenue of $2.43 billion, which came in below consensus analyst estimates of $2.45 billion.

While Barrick Gold's headline figures disappointed, UBS in a note to clients in the morning had some positive things to say:

“At Turquoise Ridge, a pre-feasibility study expected later this year for an additional shaft could increase production at the mine by 75% for 5-8 years. Elsewhere, ABX expects to complete a pre-feasibility study on the Goldrush project by mid-2015 and has another study underway at the Lower Zone at Cortez Hills where drilling results have been positive. Studies are also underway at the 60% owned South Arturo project which could start up in late 2015 with a focus on a high grade 0.44Mozs resource. Price target increased to US$19.00; Neutral rating maintained. We have revised our EPS estimates to reflect the updated guidance. Our $19.00 PT is based on a 60/40 weighting of our 11x P/CF and 1.0x P/NAV values.”

Prior to the Thursday open, Goldcorp reported (adjusted) Q2 EPS of $0.20 versus consensus EPS estimates of $0.14, which is a $0.06 beat. Revenue also beat, as revenue came in at $1.1 billion versus analyst consensus revenue estimates of $978.43 million.

The beat on earnings primarily came as a result of better production, and cost management, according to Chuck Jeannes, Goldcorp President and CEO, "Cost improvements realized through our Operating for Excellence efficiency program were particularly impressive at Peñasquito. Those savings, along with grades and recoveries contributed to earnings from Peñasquito mine operations
of approximately $130 million in the quarter.”

Barrick Gold is down by 1.14 percent in Thursday morning trading. Goldcorp is up by 0.14 percent in Thursday morning trading.