Freeport's (FCX) Earnings and Revenues Top Estimates in Q2
Freeport-McMoRan Inc. FCX recorded net income (attributable to common stock) of $343 million or 23 cents per share in second-quarter 2023, down around 59% from $840 million or 57 cents in the year-ago quarter.
Barring one-time items, adjusted earnings per share came in at 35 cents, topping the Zacks Consensus Estimate of 28 cents.
Revenues rose roughly 6% year over year to $5,737 million. The figure also surpassed the Zacks Consensus Estimate of $5,647 million. The company witnessed lower 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 fell roughly 0.7% year over year to 1,067 million pounds in the reported quarter. The figure fell short of our estimate of 1,109 million pounds.
Consolidated sales declined around 5% year over year to 1,029 million pounds of copper. The figure was lower than our estimate of 1,065 million pounds. The decline was mainly due to shipping delays in Indonesia related to the renewal of PT-FI's export license.
The company sold 495,000 ounces of gold, up around 4% year over year. The figure was lower than our estimate of 500,000 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 $1.47, up around 4% year over year. The upside was caused by increased unit net cash costs in North America. The figure was lower than our estimate of $1.51.
Average realized price for copper was $3.84 per pound, down roughly 5% year over year. The figure was lower than our estimate of $4 per pound. Average realized price per ounce for gold rose around 6% year over year to $1,942. The figure was below our estimate of $2,000.
Financial Position
Cash and cash equivalents at the end of the quarter were $6,683 million, down around 30% year over year. The company’s long-term debt was $9,458 million, down around 6% year over year.
Cash flows provided by operations were $2,723 million for the six months ended Jun 30, 2023.
Guidance
For 2023, Freeport anticipates consolidated sales volumes to be roughly 4 billion pounds of copper.
The company also expects gold sales volumes of 1.75 million ounces for 2023. It also expects sales of 79 million pounds of molybdenum for the year.
For the third quarter of 2023, Freeport expects sales volumes to be 1 billion pounds of copper, 420,000 ounces of gold and 20 million pounds of molybdenum.
Unit net cash costs for copper are predicted to average $1.55 per pound for 2023, including $1.61 per pound in the third quarter.
The company also expects operating cash flows of roughly $6.4 billion for 2023.
Capital expenditure for full-year 2023 is projected to be around $4.8 billion.
Price Performance
Freeport’s shares are up 40.7% in the past year compared with 71.3% rise of the industry.
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Zacks Rank & Other Key Picks
Freeport currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth a look in the basic materials space include PPG Industries, Inc. PPG, Carpenter Technology Corporation CRS and Silvercorp Metals Inc. SVM.
PPG Industries currently carries a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for PPG's current-year earnings has been stable over the past 60 days.
PPG Industries’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 6.8%, on average. PPG shares have gained around 22% in a year.
The Zacks Consensus Estimate for current-year earnings for CRS is currently pegged at $1.04, implying year-over-year growth of 6.3%. Carpenter Technology currently carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has a trailing four-quarter earnings surprise of roughly 198.1%, on average. The stock has gained around 97% in a year.
Silvercorp Metals currently carries a Zacks Rank #2 (Buy). The consensus estimate for current fiscal-year earnings for SVM is currently pegged at 26 cents, suggesting year-over-year growth of 23.8%.
Silvercorp Metals has a trailing four-quarter earnings surprise of roughly 12.5%, on average. The stock has rallied roughly 36% in the past year.
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