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Freeport-McMoRan Inc. Message Board

  • braindamagedbaby braindamagedbaby Jun 18, 2012 10:59 AM Flag

    Some considerations for Q2 earnings

    Last Q earnings at 80 cents/share included a charge of 16 cents/share for the debt refinicing. This one time charge will not be in Q2 earnings.

    with its 3.0 billion borrowings at average interest rate of 3%, FCX paid off debt with an 8.375% interest rate. On three billion, this will result in a savings of around 160 million/year or about 40 million/Quarter or about 4 cents/share increased earnings.

    Copper averaged realized price will come in around 3.45/lb., below last quarters 3.83. but with Grasberg back near full production, my estimates are for copper production of around 930 million lbs, vs. last qs 827 million lbs., so that basically cancels out the price drop. I'm predicting net positive cash flow of around 950 million or around $1/share. On top of our 31 cent/share dividend. There's a pretty significant chance of a upward surprise in gold production which has a current estimate of only 235k ounces. Gold production in Q1 was only 288K ounces due to the strike at Grasberg and I'm hoping for the company to make up a significant amount of the Q1 lost production in Q2. That would drop net cash costs of production significantly.

    So we'll see what happens. I'm looking for a significant earnings beat, perhaps EPS in the 1.05 range.

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