Dividend.com: Barrick Not So Golden

Barrick Gold Posts $468 Million Fourth-Quarter Loss on Impairment Charges

The world's largest gold producer, Barrick Gold(ABX Quote), said Friday that it lost $468 million in the fiscal fourth quarter, hurt by $773 million impairment charges.

The Toronto-based gold company said it lost 53 cents per share, compared with a profit of $537 million, or 61 cents per share, in the year-ago period. The latest quarter's results included 89 cents per share in impairment charges.

Excluding those one-time charges, the company saw an adjusted profit of 32 cents per share, while analysts, on average, were expecting 33 cents.

Revenue for the quarter increased to $2.11 billion, up 10% from the $1.92 billion the company earned in the same period a year ago.

Barrick's full-year 2008 income was $785 million, or 89 cents per share, down from $1.12 billion, or $1.28 per share, in 2007. Full-year revenue rose 25%, however, to $7.91 billion from $6.33 billion.

As of the end of 2008, Barrick said it had gold reserves of 138.5 million ounces, up 11% from the end of the previous year. The company said that gold production would slow slightly in 2009, but pick back up again in 2010.

We have avoided shares of Barrick Gold since our early June coverage began, when the stock was trading at $42.07. The stock has a dividend yield of 1.10%, based on last night's closing stock price of $36.44. The stock has technical support around the $22 level.

If the stock can continue its recent rebound, we see overhead resistance around the $40 to $42 price area. If that level can be beat, $50 would be next. We would remain on the sidelines for now, but Gold is racing higher and the mining stocks should be monitored closely.

Barrick Gold is not recommended at this time, holding a Dividend.com Rating of 3.2 out of 5 stars.