Freeport-McMoRan’s Q3 2016 Earnings Preview: Higher Copper Production And Cost Reduction Initiatives To Boost Results

-8.26%
Downside
44.48
Market
40.81
Trefis
FCX: Freeport logo
FCX
Freeport

We expect Freeport-McMoRan to report an improvement in its Q3 2016 results, driven by its cost reduction initiatives and higher copper production volumes, despite subdued prevailing pricing conditions for both copper and crude oil. Higher production volumes from Freeport’s expanded Cerro Verde mine in Peru are expected to boost the company’s top line. Moreover, economies of scale and the company’s cost reduction initiatives will likely help lower unit costs and prop up earnings, just like in the previous quarter (as indicated in the table below for Q2 2016). Lower costs are expected to offset the impact of weak copper and oil prices on the company’s results in Q3. Weak demand conditions for copper (primarily in China — the world’s largest consumer of copper) as a result of subdued global economic conditions, have negatively impacted prices of the metal, whereas a global supply glut has adversely impacted oil prices. The following table summarizes our expectations.

FCX Q3 2016 Pre-Earnings

Have more questions about Freeport-McMoRan? See the links below.

Relevant Articles
  1. Will Freeport Stock Recover To Pre-Inflation Shock Highs Of $52 Per Share?
  2. What To Expect From Freeport’s Q2 Results
  3. How Is Freeport Stock Faring Amid Volatile Copper Prices?
  4. Copper Prices Have Recovered A Bit. Is Freeport Stock Worth A Look?
  5. Lower Copper Prices Will Weigh On Freeport’s Q3 Results
  6. What’s Happening With Freeport-McMoRan Stock?

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Freeport-McMoRan

See More at Trefis | View Interactive Institutional Research (Powered by Trefis)

Get Trefis Technology