Tuesday's Market Minute: Freeport-McMoRan Earnings To Show Mixed View Of Copper Market

The choppy reopening of China and volatile copper prices have made the outlook for copper giant Freeport-McMoRan (FCX) murkier than expected.

Copper prices started 2023 on a strong note. The world had high expectations for China’s economy to reopen from Covid-19 restrictions with a bang, with copper demand rising in tandem. But softer copper demand from China, which consumes more than half of the world’s refined copper, began weighing on prices for the metal in the second quarter of the year, which weighed on Freeport’s earnings.

When the company reports third quarter results on Oct. 19, analysts expect earnings to continue a sequential decline for the second straight quarter and for FCX to post earnings of 32 cents a share, down from 35 cents in the prior quarter, but higher than the year-ago figure of 26 cents. Analysts expect Freeport to have benefitted from a slight improvement in copper prices in the third quarter, an improved performance at its Indonesia operations, and its efforts to increase mining rates in South America and lower its costs. 

Analysts say near-term, Dr. Copper, and therefore the company, will be affected by global economic events. But Freeport-McMoRan CEO Richard Adkerson has remained focused on the opportunities in the long-term look: EVs, alternative energy, and the connected industries.

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