Freeport-McMoRan Tops EPS Estimates

Commodities & Metals

Published: January 22, 2013 8:39 am

Last Updated: April 27, 2020 9:45 pm

Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) reported fourth quarter and full-year 2012 results before markets opened this morning. The mining company posted diluted quarterly earnings per share (EPS) of $0.78 on revenues of $4.51 billion. In the same period a year ago, Freeport-McMoRan reported EPS of $0.67 on $4.16 billion in revenues. Fourth-quarter results also compare to the consensus estimates for EPS of $0.70 on revenues of $4.47 billion.

For the full year, the company reported adjusted EPS of $3.19 on revenues of $18.01 billion, compared with EPS of $4.78 in 2011 on revenues of $20.88 billion. The consensus estimates called for EPS of $3.15 on revenues of $18.15 billion.

The company’s CEO said:

We are positive about the long-term outlook for our business, the markets we serve and the opportunities that the pending oil and gas acquisitions will provide. We are focused on executing our strategy of developing long-term resources in a cost effective and financially attractive manner to generate long-term value for shareholders.

Freeport-McMoRan forecast sales of copper to rise from 3.65 billion pounds of copper in 2012 to 4.3 billion pounds in 2013. Gold sales are expected to rise from 1 million ounces to 1.4 million ounces, and molybdenum sales are forecast to rise from 83 million pounds in 2012 to 90 million pounds in 2013.

Net cash costs per pound of copper are forecast to fall from $1.54 in the fourth quarter of 2012 to an average of $1.35 per pound in 2013, based on current sales volumes and a price of $1,700 an ounce for gold and $11 a pound for molybdenum.

The company’s pending $20 billion acquisitions of McMoRan Exploration Co. (NYSE: MMR) and Plains Exploration & Production Co. (NYSE: PXP) are expected to close in the second quarter of 2013. Freeport-McMoRan’s shares are down about 13% since the December 7 announcement of the acquisitions that have put the firm back into the energy production business.

Shares are up about 1.5% at $34.15 in premarket trading this morning in a 52-week range of $30.54 to $48.96. Prior to today’s release Thomson/Reuters had a consensus price target of around $40.00 on the company’s shares.

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