Mining company Barrick Gold Corp. (TSX:ABX)(NYSE:GOLD) reported lower first-quarter earnings on Wednesday due to lower production at its Carlin and Cortez mines in Nevada. However, profit was above Wall Street expectations thanks to higher gold and copper prices. The company doubled its quarterly dividend.

Barrick Posts Lower Earnings and Gold Production

The Canadian mining giant said net income fell to $438 million, or $0.25 per share, in the quarter ended March 31, down from $538 million, or $0.30 per share, a year earlier.

Adjusted earnings also fell to $0.26 per share during the period. According to FactSet, analysts were expecting $0.24 per share.

Revenue fell to $2.85 billion from $2.96 billion, while analysts had expected a drop to $2.8 billion.

Barrick produced 990,000 ounces of gold during the first quarter of 2022, compared to 1.1 million ounces in the prior-year quarter. The drop in production was in line with analysts’ expectations.

The realized price of gold increased during the period from $1,777 to $1,876 per ounce.

Inflation and Geopolitical Tensions Impacted Barrick’s Business

Barrick said rising inflation, exacerbated by the Russia-Ukraine conflict and Western sanctions, had a direct impact on the miner’s business, not just in terms of oil and gas prices, but also on the cost and availability of inputs. The omicron variant has caused labor shortages and other production disruptions.

All-in sustaining costs, an industry measure that reflects total costs associated with production, were up to $1,164 an ounce of gold from $1,018 an ounce a year earlier. 

Barrick’s president and chief executive Mark Bristow commented: “Fortunately for Barrick, managing risks in challenging geopolitical jurisdictions is one of our core competencies, largely gained in Africa, where our mines have continued to operate steadily and profitably through civil wars, coups d’état, complex logistics and delicate negotiations with host governments.”

Dividend Hiked, 2022 Guidance Maintained

Barrick declared a dividend of $0.20 per share for the first quarter, nearly double from the previous quarter.

For the first time, the dividend included a performance component of $0.10 per share, in line with the company’s new dividend policy.

Barrick said that despite the slowdown in the quarter, the company expects to meet its production guidance in 2022.
The gold stock is up approximately 20% year-to-date.