The ongoing rise in cost continues to weigh on the mining sector, as evidenced again by the performance of Barrick Gold (NYSE:ABX) in the latest quarter, where it missed its EPS estimates by a huge 10 cents a share.
For the fourth quarter ended December 31, Barrick earned $1.17 billion, or $1.17 a share. Analysts had been looking for $1.27 a share.
The rise in gold prices during the quarter wasn't enough to offset the soaring cost of doing business, although they did boost revenue to a huge $3.79 billion or 26 percent increase. Gold price increases accounted for 22 percent of the gains.
Net income fell from $961 million, or 96 cents a share last year to $959 million, or 96 cents a share in the latest quarter.
Fourth quarter gold production came to 1.81 million ounces, at $505.00 an ounce. For all of 2011 gold production reached 7.68 million ounces, at an average cost of $460.00 an ounce.
Gold production estimates for 2012 are from 7.3 million to 7.8 million ounces at a cah cost range of $520 to $560 an ounce. Barrick said the higher costs in production are the consequences of rising labor costs and inflation, as well as a change in the production mix.
The most recent analyst activity on Barrick was a downgraded from Canaccord Genuity on January 30, where they were taken from a "Buy" rating to a "Hold" rating, with a price target of $57.50 on the gold mining giant.
Barrick was trading at $47.65, up $0.22, or 0.46 percent, as of 12:45 PM EST.
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