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Freeport-McMoRan's stock drops after lowered outlook, citing drop in copper prices

Tomi Kilgore

Shares of Freeport-McMoRan Inc. dropped 4.8% in morning trading Monday, after the metals miner lowered its second-quarter outlook given the drop in average copper prices during the quarter. The company said copper prices averaged $2.77 per pound on the London Metal Exchange during the second quarter, compared with the average price of $2.94 a pound recorded at the end of the first quarter. The metals miner expects the impact of lower copper prices to lower second-quarter revenue by about $85 million. The company said current analyst estimates reflect an average copper price of about $2.95 a pound. As a result, Freeport-McMoRan said it estimates the impact on second-quarter revenue of lower copper prices, including adjustments for provisionally priced sales recorded at March 31, to be about $260 million. The company said it expects to record a loss of 5 cents a share to net income as a result of the estimated prices. Freeport-McMoRan's stock has shed 15.7% over the past three months through Friday, while the SPDR Materials Select Sector ETF has gained 4.2% and the S&P 500 has tacked on 3.8%.