Freeport-McMoRan Reports Strong Q1, Kathleen Quirk to Become CEO in June
Freeport-McMoRan Inc. (FCX) recently released its financial results for the first quarter of fiscal 2024, showcasing robust performance that exceeded market expectations. The company’s revenue reached $6.32 billion, surpassing the consensus estimate of $5.66 billion. Adjusted EPS also outperformed analysts’ projections, coming in at $0.32 compared to the consensus of $0.27.
Copper sales, excluding purchases, totaled 1.1 billion pounds, marking a 33% increase Y/Y. This growth was attributed to higher mining and milling rates, as well as improved ore grades at PT-FI. The average realized price per pound stood at $3.94, while production reached 1.085 billion pounds. Gold sales also witnessed significant growth, more than doubling to 568 thousand ounces. The average realized price per ounce for gold was $2,145.
Freeport-McMoRan’s operating income for the quarter amounted to $1.63 billion, slightly higher than the $1.60 billion reported a year ago. Operating cash flow for the quarter totaled $1.90 billion, a substantial increase compared to the $1.05 billion recorded in the previous year’s corresponding quarter. The company ended the quarter with $6.3 billion in cash and equivalents, while consolidated debt stood at $9.4 billion.
Outlook for Q2 and 2024
Looking ahead, Freeport-McMoRan projects consolidated sales volumes of 1.0 billion pounds for copper, 500 thousand ounces for gold, and 21 million pounds for molybdenum in the second quarter of fiscal 2024. The company anticipates unit net cash costs for copper mines to average $1.57 per pound.
For the full year 2024, Freeport-McMoRan now estimates consolidated sales volumes of approximately 4.15 billion pounds of copper, 2.0 million ounces of gold, and 84 million pounds of molybdenum. It expects consolidated unit net cash costs for copper mines to average $1.57 per pound throughout 2024. The company anticipates operating cash flows of around $7.4 billion for the year, based on average price assumptions of $4.25 per pound for copper, $2,300 per ounce for gold, and $20.00 per pound for molybdenum for the remainder of 2024. Capital expenditures are expected to be approximately $4.6 billion for the year.
Kathleen L. Quirk, who will become President and CEO in June 2024, expressed optimism about the company’s future, highlighting the positive market fundamentals for copper and the company’s strong position as a leading copper producer. She acknowledged the company’s multiple options for future growth and the experience of its team.
Investors can gain exposure to Freeport-McMoRan’s stock through the Sprott Copper Miners ETF (COPP) or the Exchange Traded Concepts Trust Optica Rare Earths & Critical Materials ETF (CRIT).
Price Action
Despite the strong earnings report, FCX shares experienced a slight decline in the market, losing 1.78% to trade at $48.08. This movement is likely attributed to broader market weakness rather than company-specific factors.
