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Freeport's (FCX) Earnings In Line, Sales Lag Estimates in Q3

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Freeport-McMoRan Inc. (FCX - Free Report) logged net loss (attributable to common stock) of $131 million or 9 cents per share in third-quarter 2019, against a profit of $556 million or 38 cents in the year-ago quarter. The bottom line in the reported quarter was hurt by lower copper production and prices.

Barring one-time items, adjusted loss came in at a penny per share, which matched the Zacks Consensus Estimate.

Revenues dropped around 33% year over year to $3,308 million, missing the Zacks Consensus Estimate of $3,579 million.

Freeport-McMoRan Inc. Price, Consensus and EPS Surprise

 

Freeport-McMoRan Inc. Price, Consensus and EPS Surprise

Freeport-McMoRan Inc. price-consensus-eps-surprise-chart | Freeport-McMoRan Inc. Quote

Operational Update

Copper production fell roughly 14% year over year to 864 million pounds in the reported quarter.

Consolidated sales from mines were 795 million pounds of copper, 243,000 ounces of gold and 22 million pounds of molybdenum. Copper sales volume fell around 24% year over year.

Consolidated average unit net cash costs per pound of copper were $1.59, up from 93 cents reported in the year-ago quarter.

Average realized price for copper was $2.62 per pound, down around 6% from $2.80 in the prior-year quarter. Average realized price per ounce for gold rose nearly 25% to $1,487 from $1,191 in the year-ago quarter. Average realized price per pound for molybdenum was $12.89, up 4% year over year.

Financial Position

Cash and cash equivalents at the end of the quarter were $2,247 million, down roughly 51% year over year. The company’s total debt was around $9.9 billion, down around 12% year over year.

Freeport’s operating cash flows were $224 million in the reported quarter.

Guidance

Freeport anticipates consolidated sales volumes for 2019 to be roughly 3.3 billion pounds of copper, 874,000 ounces of gold and 92 million pounds of molybdenum. This projection also includes 870 million pounds of copper, 200,000 ounces of gold and 24 million pounds of molybdenum for fourth-quarter 2019.

For 2019, the company expects operating cash flows of roughly $1.6 billion. Capital expenditures are expected to be around $2.6 billion, which includes $1.6 billion for major mining projects that are mainly related to underground development in Grasberg, Indonesia and development of the Lone Star copper leach project.

Price Performance

Freeport’s shares have lost 3.7% year to date compared with the industry’s 11.7% rise.



 

Zacks Rank & Key Picks

Freeport currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth a look in the basic materials space include Agnico Eagle Mines Limited (AEM - Free Report) , Kinross Gold Corporation (KGC - Free Report) and Franco-Nevada Corporation (FNV - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Agnico Eagle has a projected earnings growth rate of 158.6% for the current year. The company’s shares have rallied 45% in a year’s time.

Kinross has projected earnings growth rate of 170% for the current year. The company’s shares have surged around 67% in a year’s time.

Franco-Nevada has estimated earnings growth rate of 35.9% for the current year. The company’s shares have gained roughly 47% in a year’s time.

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