Freeport-McMoRan stock rises on upbeat Q3 results

Freeport-McMoRan (FCX) reported a 99% jump in earnings for the third quarter helped by higher copper ore grades, gold ore grades and operating rates in Indonesia. The results exceeded analysts’ expectations. Following this, the stock rose over 3% in the premarket session.

Net income soared 99% to $556 million and earnings surged to $0.38 per share from $0.19 per share a year ago. Adjusted EPS rose to $0.35 from $0.34 in the prior-year quarter.

Revenue grew 14% to $4.91 billion. Copper sales jumped 12% primarily reflecting higher ore grades and operating rates in Indonesia. Gold sales more than doubled from last year, primarily reflecting higher ore grades and operating rates in Indonesia. Molybdenum sales of 22 million pounds were lower than the July 2018 estimate of 24 million pounds and approximated last year sales.

Average realized prices in third-quarter 2018 were $2.80 per pound for copper, $1,191 per ounce for gold and $12.40 per pound for molybdenum.

Based on current sales volume and cost estimates, and assuming average prices of $2.85 per pound of copper, $1,200 per ounce of gold and $12.00 per pound of molybdenum for fourth-quarter 2018, the company’s consolidated operating cash flows are estimated to be about $4.2 billion for the year 2018.

Sales volumes for the year 2018 are expected to be about 3.8 billion pounds of copper, 2.45 million ounces of gold and 95 million pounds of molybdenum, including 790 million pounds of copper, 330,000 ounces of gold and 25 million pounds of molybdenum in the fourth quarter of 2018.

Capital expenditures are expected to be about $2 billion for the year 2018, including $1.2 billion for major mining projects primarily associated with underground development activities in the Grasberg minerals district and development of the Lone Star oxide project.

At September 30, 2018, consolidated debt totaled $11.1 billion and consolidated cash totaled $4.6 billion. The company had no borrowings and had $3.5 billion available under its revolving credit facility at September 30, 2018.

Shares of Freeport-McMoRan ended Tuesday’s regular session down 3.25% at $11.61 on the NYSE. The stock has fallen over 21% in the past year and over 38% in the year so far.

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