Mining & Metals
Update: Barrick Gold's Q1 Adjusted Net Earnings Climb 173% YoY, Lower Dividend As Part of New Dividend Policy
(Adding share price move in first paragraph, additional background information on the dividend in paragraph 11 and commentary from National Bank in paragraph 13)Barrick Gold (ABX.TO) was at last look up by more than 3% in U.S. premarket trade after reporting a 173% jump in adjusted net earnings year over year in the first quarter, citing higher gold production, lower costs and a supportive gold price.Adjusted net earnings were US$1.65 billion, or $0.98 per share, surging from $603 million, or $0.35 per share. The result exceeded the earnings per share consensus estimate of $0.81 as compiled by FactSet.Revenues were $5.22 billion, up from $3.13 billion. The result beat the sales consensus estimate of $4.83 billion as compiled by FactSet.Gold production was 719,000 ounces, down from 758,000 ounces but exceeding the guidance range of 640,000-680,000 ounces. Realized gold price rose 66% to $4,823/ounce.Copper production was 49,000 tonnes, up from 44,000 tonnes.Gold production is expected to increase sequentially throughout the year. Second-quarter gold production is forecast at 730,000 to 770,000 ounces.Full-year 2026 gold production guidance was maintained at 2.90 million to 3.25 million ounces. Copper production guidance also remains unchanged at 190,000 to 220,000 tonnes.Barrick's planned initial public offering of a minority stake of a company that will hold its North American gold assets is on track for completion by the end of 2026, subject to market conditions and necessary approvals.The assets include Barrick's stakes and operatorship of Nevada Gold Mines and Pueblo Viejo, as well as the Fourmile project.Additionally, Barrick has declared a first-quarter dividend of $0.175 per share. The dividend will be paid on June 15 to shareholders of record at the close of business on May 29.The dividend represents a decrease from the $0.42 per share dividend announced for the fourth quarter of 2025. However, Barrick had in February 2026 flagged a new dividend policy, saying that in Q4 2025 and going forward, the company's new dividend policy targets a total payout of 50% of attributable free cash flow on an annualized basis, comprised of a fixed base quarterly dividend of $0.175 per share and a performance top-up component at each year end based on the attributable free cash flow during the year. The dividend paid in any given year may be higher or lower than the 50% target based on the strength of cash flow, capital needs, balance sheet considerations and other factors.Barrick's board has also authorized the repurchase of up to $3.0 billion of the company's outstanding common shares at prevailing market prices.National Bank noted Barrick reported Q1 financial and operating results were above its estimates and consensus. "All else equal," the bank said, "we expect shares to trade ahead of peers today given the stronger Q1 operational performance, enhanced capital return policy and plans to surface value from the IPO of its North American business unit."
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