Freeport's Earnings and Revenues Surpass Estimates in Q2

Freeport-McMoRan Inc. FCX recorded net income (attributable to common stock) of $616 million or 42 cents per share in second-quarter 2024, up around 80% from $343 million or 23 cents in the year-ago quarter.

Barring one-time items, adjusted earnings per share were 46 cents, topping the Zacks Consensus Estimate of 39 cents.

Revenues rose roughly 15% year over year to $6,624 million. The figure surpassed the Zacks Consensus Estimate of $5,985.9 million. The company witnessed higher copper and gold prices in the reported quarter.

Operational Highlights

Copper production fell around 3% year over year to 1,037 million pounds in the reported quarter. The figure was ahead of our estimate of 1,030 million pounds.

Consolidated sales declined approximately 9.5% year over year, reaching 931 million pounds of copper, falling short of our estimate of 975 million pounds. This downside was mainly due to shipping delays in Indonesia, which were related to the timing of renewing PT-FI's copper concentrate export license.

The company sold 361,000 ounces of gold, down around 27% year over year. FCX also sold 21 million pounds of molybdenum, up around 5% year over year, in the reported quarter.

Consolidated average unit net cash costs per pound of copper were $1.73, up from $1.47 a year ago. The figure was higher than our estimate of $1.57.

The average realized copper price was $4.48 per pound, up around 17% year over year. The figure was higher than our estimate of $4.25 per pound. The average realized price per ounce for gold rose around 18% year over year to $2,299. The figure was below our estimate of $2,301.

Financial Position

Cash and cash equivalents at the end of the quarter were $5,273 million, down around 21% year over year. The company's total debt was $9,426 million, down around 1% year over year.

Cash flows provided by operations were around $1.9 billion in the reported quarter, up around 17% year over year.

Guidance

Freeport expects consolidated sales volumes for 2024 to be around 4.1 billion pounds of copper, 1.8 million ounces of gold and 82 million pounds of molybdenum. This includes third-quarter estimates of 1 billion pounds of copper, 475,000 ounces of gold and 20 million pounds of molybdenum.

Consolidated copper and gold production volumes for 2024 are expected to exceed sales volumes for the year. This is due to the deferral of approximately 100 million pounds of copper and 120,000 ounces of gold, which will be processed by PT-FI's new downstream processing facilities and sold as refined metal in 2025.

The unit net cash costs for copper are expected to average $1.63 per pound for 2024. The same has been projected at $1.71 per pound for the third quarter.

The company also sees operating cash flows of approximately $7.2 billion for 2024. Capital expenditures for the full year are projected to be around $4.7 billion.

Price Performance

Freeport's shares are up 9.3% in the past year compared with an 18.2% rise in the industry.

Image Source: Zacks Investment Research

Zacks Rank & Key Picks

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

Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation CRS, Eldorado Gold Corporation EGO, and Kinross Gold Corporation KGC. Carpenter Technology, Eldorado Gold, and Kinross sport a Zacks Rank #1 (Strong Buy).

The Zacks Consensus Estimate for CRS's current-year earnings is pegged at $4.35, indicating a year-over-year rise of 282%. CRS' earnings beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, the average earnings surprise being 15.1%. The company's shares have soared 113.2% in the past year. It is slated to report fiscal fourth-quarter results on Jul 25.

The Zacks Consensus Estimate for EGO's current-year earnings is pegged at $1.09, indicating a year-over-year rise of 91.2%. EGO's earnings estimates have increased 10% in the past 60 days. EGO beat the consensus estimate in the last four quarters, with the average earnings surprise being 430.7%. The stock has rallied 49.9% in the past year.It is scheduled to release second-quarter results on Jul 25.

The Zacks Consensus Estimate for Kinross's current-year earnings is pegged at 52 cents, indicating a rise of 18.2% from the year-ago levels. KGC beat the consensus in the last four quarters, with the average earnings surprise being 46%. The stock has surged nearly 79.3% in the past year. It will report results for the second quarter on Jul 31.

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