Freeport's (FCX) Earnings and Revenues Surpass Estimates in Q3
Freeport-McMoRan Inc. FCX recorded net income (attributable to common stock) of $454 million or 31 cents per share in third-quarter 2023, up around 12.4% from $404 million or 28 cents in the year-ago quarter.
Barring one-time items, adjusted earnings per share came in at 39 cents, topping the Zacks Consensus Estimate of 32 cents.
Revenues rose nearly 16.4% year over year to $5,824 million. The figure also surpassed the Zacks Consensus Estimate of $5,526.2 million. The company witnessed higher copper sales and prices in the reported quarter.
Freeport-McMoRan Inc. Price, Consensus and EPS Surprise
Freeport-McMoRan Inc. price-consensus-eps-surprise-chart | Freeport-McMoRan Inc. Quote
Operational Highlights
Copper production rose roughly 2.7% year over year to 1,085 million pounds in the reported quarter. The figure fell short of our estimate of 1,088 million pounds.
Consolidated sales increased around 4.6% year over year to 1,109 million pounds of copper. The figure was higher than our estimate of 1,030 million pounds. The upside can be attributed to the timing of shipments and higher mining rates.
The company sold 399,000 ounces of gold, down around 29.4% year over year. The figure was lower than our estimate of 420,000 ounces. It also sold 20 million pounds of molybdenum (flat year over year) during the quarter, in line with our estimate of 20 million pounds.
Consolidated average unit net cash costs per pound of copper were $1.73, down around 1% year over year. The figure was higher than our estimate of $1.61.
The average realized price for copper was $3.8 per pound, up around 8.6% year over year. The figure was higher than our estimate of $3.9 per pound. The average realized price per ounce for gold rose around 12.8% year over year to $1,898. The figure was below our estimate of $1,950.
Financial Position
Cash and cash equivalents at the end of the quarter were $5,745 million, down around 33% year over year. The company’s long-term debt was $9,370 million, down around 3% year over year.
Cash flows provided by operations were $3,959 million for the nine months ended Sep 30, 2023.
Guidance
For 2023, Freeport anticipates consolidated sales volumes to be roughly 4.06 billion pounds of copper.
The company also expects gold sales volumes of 1.74 million ounces for 2023. It also expects sales of 80 million pounds of molybdenum for the year.
For the fourth quarter of 2023, Freeport expects sales volumes to be 1.1 billion pounds of copper, 580,000 ounces of gold and 20 million pounds of molybdenum.
Unit net cash costs for copper are predicted to average $1.63 per pound for 2023.
The company also expects operating cash flows of roughly $5.4 billion for 2023.
Capital expenditure for full-year 2023 is projected to be around $4.8 billion.
Price Performance
Freeport’s shares are up 22.3% in the past year compared with a 32.5% rise of the industry.
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Zacks Rank & Other Key Picks
Freeport currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are WestRock Company WRK, The Andersons Inc. ANDE and Koppers Holdings Inc. KOP, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, the Zacks Consensus Estimate for Westrock’s current fiscal year has been revised upward by 5.2%. WRK beat the Zacks Consensus Estimate in three of the last four quarters while missing in one quarter, with the average earnings surprise being 30.7%. The company’s shares have rallied 16.1% in the past year.
The Zacks Consensus Estimate for ANDE's current-year earnings has been revised 3.3% upward over the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4% on average. ANDE shares have rallied around 53.4% in a year.
The consensus estimate for Koppers’ current fiscal year earnings is pegged at $4.45, indicating year-over-year growth of 7.5%. KOP beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 21.7%. The company’s shares have surged 65% in the past year.
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