Freeport-McMoRan's Q2 Earnings Boosted By Strong Prices Amid Indonesian Shipping Delays

Freeport-McMoRan Inc. FCX shares are trading lower after the company reported second-quarter FY24 results.

Revenue stood at $6.62 billion, beating the consensus of $5.99 billion. Adjusted EPS was $0.46, beating the consensus of $0.38.

Copper sales totaled 931 million pounds, down 10% year-over-year and 5% below the April 2024 estimate, due to shipping delays in Indonesia while awaiting PT-FI’s copper concentrate export license, granted in July 2024.

The average realized price per pound was $4.48, and production totaled 1.037 billion pounds.

Gold sales stood at 361 thousand ounces, down 27% Y/Y and 28% lower than the April 2024 estimate of 500 thousand ounces. The average realized price per ounce stood at $2,299 in the quarter. 

Operating income stood at $2.05 billion vs $1.41 billion a year ago. Operating cash flow for the quarter totaled $1.96 billion, compared to $1.67 billion a year ago.

Freeport-McMoRan had $6.2 billion in cash and equivalents at the end of the quarter. Consolidated debt totaled $9.4 billion.

2024 Outlook: Freeport-McMoRan now expects consolidated sales volumes to be ~4.1 billion pounds of copper, 1.8 million ounces of gold, and 82 million pounds of molybdenum. 

It sees consolidated unit net cash costs for copper mines to average $1.63 per pound of copper in 2024.

Q3 Outlook: Freeport-McMoRan expects consolidated sales volumes to be 1.0 billion pounds of copper, 475 thousand ounces of gold, and 20 million pounds of molybdenum.

It expects unit net cash costs for copper mines to average $1.71 per pound of copper.

The company expects operating cash flows of ~$7.2 billion in 2024, assuming average prices of $4.25 per pound for copper, $2,300 per ounce for gold, and $20.00 per pound for molybdenum for the second half of 2024.

Richard Adkerson, Chairman of the Board, and Kathleen Quirk, President and Chief Executive Officer, said, “Our team reached an important milestone in Indonesia during the quarter with the start of commissioning of our major new copper smelter, and we are working to execute a safe and efficient ramp-up to full capacity by the end of the year.”

Read: Freeport-McMoRan Plans Production Ramp-Up: ‘It’s Just A Matter Of Time’ New CEO Says

“This strategically important investment is integral to support our long-term, high-quality operations in the Grasberg minerals district. Copper pricing was strong in the second quarter. The long-term outlook for copper is supported by copper’s increasingly important role in the global economy and limited available supplies to meet growing demand.”

Investors can gain exposure to the stock via Sprott Copper Miners ETF COPP and Exchange Traded Concepts Trust Optica Rare Earths & Critical Materials ETF CRIT.

Also Read: Copper Shortages Signal Bright Future For Freeport-McMoRan, Alcoa, Buenaventura: Morgan Stanley

Price Action: FCX shares are down 2% at $45.09 at the last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo via Midjourney