Freeport-McMoran (FCX) Tops Q2 EPS by 6c, Revenues Beat

July 25, 2018 8:02 AM EDT
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Price: $36.65 +4.15%

Revenue Growth %: +88.3%

Financial Fact:
Net income: 286M

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Freeport-McMoran (NYSE: FCX) reported Q2 EPS of $0.58, $0.06 better than the analyst estimate of $0.52. Revenue for the quarter came in at $5.17 billion versus the consensus estimate of $4.94 billion.

  • Net income attributable to common stock totaled $869 million, $0.59 per share, in second-quarter 2018. After adjusting for net gains of $16 million, $0.01 per share, second-quarter 2018 adjusted net income attributable to common stock totaled $853 million, $0.58 per share.
  • Consolidated sales totaled 989 million pounds of copper, 676 thousand ounces of gold and 24 million pounds of molybdenum in second-quarter 2018.
  • Consolidated sales for the year 2018 are expected to approximate 3.8 billion pounds of copper, 2.4 million ounces of gold and 95 million pounds of molybdenum, including 970 million pounds of copper, 700 thousand ounces of gold and 24 million pounds of molybdenum in third-quarter 2018.
  • Average realized prices in second-quarter 2018 were $3.08 per pound for copper, $1,274 per ounce for gold and $12.89 per pound for molybdenum.
  • Average unit net cash costs in second-quarter 2018 were $0.96 per pound of copper and are expected to average $1.04 per pound of copper for the year 2018.
  • Operating cash flows totaled $1.3 billion (net of $0.2 billion in working capital uses and timing of other tax payments) in second-quarter 2018 and $2.7 billion (net of $0.2 billion in working capital uses and timing of other tax payments) for the first six months of 2018. Based on current sales volume and cost estimates, and assuming average prices of $2.75 per pound for copper, $1,250 per ounce for gold and $11.00 per pound for molybdenum for the second half of 2018, operating cash flows are expected to approximate $4.3 billion (net of $0.2 billion in working capital uses and timing of other tax payments) for the year 2018.
  • Capital expenditures totaled $0.5 billion (including approximately $0.3 billion for major mining projects) in second-quarter 2018 and $0.9 billion (including approximately $0.5 billion for major mining projects) for the first six months of 2018. Capital expenditures for the year 2018 are expected to approximate $2.0 billion, including $1.1 billion for major mining projects primarily associated with underground development activities in the Grasberg minerals district in Indonesia and development of the Lone Star oxide project in Arizona.
  • In April 2018, FCX repaid $454 million in debt, consisting of the redemption of $404 million of senior notes due 2022 and $50 million of senior notes due 2023.
  • At June 30, 2018, consolidated debt totaled $11.1 billion and consolidated cash totaled $3.9 billion. FCX had no borrowings and $3.5 billion available under its revolving credit facility at June 30, 2018.
  • On June 27, 2018, FCX declared a quarterly cash dividend of $0.05 per share on its common stock, which will be paid on August 1, 2018.
  • In July 2018, FCX and PT Freeport Indonesia (PT-FI) entered into a non-binding Heads of Agreement with PT Indonesia Asahan Aluminium (Persero) (Inalum) and Rio Tinto to establish a new long-term partnership between FCX, Inalum and the Indonesian government.

Richard C. Adkerson, President and Chief Executive Officer, said, "Our second quarter results reflect strong performance from our global operations and a continued focus on productivity, cost management and capital discipline. During the first half of 2018, we generated $2.7 billion in cash flow from operations and capital expenditures totaled $0.9 billion, enabling further strengthening of our balance sheet and advancement of initiatives to build value for FCX shareholders. We achieved important progress during the quarter to reach a new long-term partnership structure with the Indonesian government, and we remain focused on completing negotiation and documentation of definitive agreements to restore long-term stability for our Grasberg operations.

Despite the recent decline in copper prices associated with the uncertain impact on the global economy of recent international trade actions, we remain positive on the outlook for copper prices given limitations on supply and the important role of copper in the global economy. To date, we have not experienced a decline in demand for our products, but will be prepared to adjust our plans if necessary to respond to market conditions. Our shareholders are well positioned to benefit from FCX’s global leadership position in copper, supported by a large, high-quality portfolio of long-lived, geographically diverse assets."

For earnings history and earnings-related data on Freeport-McMoran (FCX) click here.



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