Barrick Hits a Triple

But numbers fall short of estimates.
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Barrick Gold (ABX) said third-quarter earnings more than tripled from a year ago and sales more than doubled, but the latest quarter missed Wall Street targets anyway.

The Toronto-based miner made $405 million, or 46 cents a share, for the quarter ended Sept. 30, up from the year-ago $113 million, or 21 cents a share. Sales soared to $1.63 billion from $627 million a year earlier.

Analysts surveyed by Thomson Financial were looking for a 49-cent profit on sales of $1.75 billion.

"Our third-quarter results demonstrate the Company's ability to generate robust earnings and cash flow through expanded margins from its global portfolio of assets," said CEO Greg Wilkins. "This has translated into impressive per share growth as we benefit from leverage to higher metal prices."

Barrick produced 2.2 million ounces of gold at total cash costs of $281 per ounce, compared to 1.5 million ounces produced at total cash costs of $210 per ounce for the prior-year quarter. The increase in production year-over-year is due to the successful acquisition of Placer Dome.

Barrick's financial results benefited from the strong gold price, as it realized $581 per ounce on its gold sales. During the third quarter, Barrick sold all its gold production at spot prices, and incurred a $79 million charge against gold sales for the impact of the previously-announced Placer Dome hedge book close-out. In the first nine months, the company's margin over its total cash costs has increased by 47% year-over-year due to the rising gold price environment. Barrick also produced 95 million pounds of copper during the third quarter 2006, and realized $3.32 per pound on its copper sales relative to its total cash costs of $0.81 per pound.

The company said it expects gold production in the fourth quarter to be its best quarterly performance and to meet its original 2006 full year guidance. Barrick said it is targeting to produce about 8.6 million ounces of gold at total cash costs of about $285 per ounce.

The company expects to meet its 2006 copper production guidance of 370 million pounds at total cash costs of about $0.80 per pound.