Freeport-McMoRan’s Q3 2016 Earnings Review: Decline In Unit Costs Boosts Earnings As Company Prioritizes Cost And Debt Reduction
Freeport-McMoRan reported an improvement in its Q3 earnings, with higher copper production volumes and the company’s cost reduction initiatives translating into lower unit costs and higher profits. Higher production volumes from the expanded Cerro Verde mine drove a 23% year-over-year increase in the company’s shipments, with economies of scale and the company’s cost reduction initiatives driving down unit costs by 25% year-over-year. [1] In the prevailing environment of subdued copper and oil prices, cost reduction has been the major focus area for Freeport, with the company expecting unit cash costs for copper production to decline by 22% year-over-year for the full year 2016. [1] Moreover, lower oil prices adversely impacted the results of the company’s Oil and Gas division. The company has already signed agreements for the sale of its Onshore California and Deepwater Gulf of Mexico oil and gas assets, with the proceeds of both these transactions earmarked for debt reduction. Going forward, given the unfavorable prevailing commodity pricing environment, debt reduction and cost reduction will continue to remain key focus areas for Freeport in the near term.
Have more questions about Freeport-McMoRan? See the links below.
- What Is Freeport-McMoRan’s Fundamental Value Based On 2015 Results?
- What Is Freeport-McMoRan’s Revenue And EBITDA Breakdown?
- How Has Freeport-McMoRan’s Revenue Composition Changed Over The Last 5 Years?
- By What Percentage Did Freeport-McMoRan’s Revenue & EBITDA Decline Over The Last 5 Years?
- By What Percentage Can Freeport-McMoRan’s Revenue & EBITDA Change Over The Next 3 Years?
- How Will Freeport-McMoRan’s Revenue Composition Change by 2020?
- Why Have Copper Prices Declined Over The Past Year?
- Why Is China Important For The Global Copper Industry ?
- Will Freeport Stock Recover To Pre-Inflation Shock Highs Of $52 Per Share?
- What To Expect From Freeport’s Q2 Results
- How Is Freeport Stock Faring Amid Volatile Copper Prices?
- Copper Prices Have Recovered A Bit. Is Freeport Stock Worth A Look?
- Lower Copper Prices Will Weigh On Freeport’s Q3 Results
- What’s Happening With Freeport-McMoRan Stock?
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Notes:- Freeport-McMoRan’s Q3 2016 Earnings Release, Freeport-McMoRan News Release [↩] [↩]