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Why Analysts Expect Freeport-McMoRan’s 2Q17 Profits to Rise


Jun. 27 2017, Updated 9:08 a.m. ET

Freeport-McMoRan’s 2Q17 profits

Previously, we looked at Teck Resources’ (TECK) 2Q17 earnings estimates. In this part, we’ll see what analysts are projecting for Freeport-McMoRan’s (FCX) 2Q17 earnings. Freeport is the world’s second-largest copper producer (GLNCY) (SCCO) and also has some energy assets.

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Analysts’ projections

Freeport is expected to post revenues of $3.8 billion in 2Q17 compared to $3.3 billion in 1Q17. The company’s adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) is also expected to rise to ~$1.3 billion in 2Q17 compared to ~$1.0 billion in the sequential quarter.

The sequential increase in Freeport’s 2Q17 EBITDA could look intriguing because copper prices have weakened in 2Q17 compared to the previous quarter. However, Freeport’s 2Q17 copper shipments could rise compared to the previous quarter. The company’s 1Q17 copper shipments were negatively impacted due to the export ban in Indonesia (EIDO). The operations, which are expected to account for almost 30.0% of Freeport’s 2017 copper shipments, were negatively impacted in 1Q17 due to the export ban. Now that Freeport has received an export permit in Indonesia, the company’s 2Q17 shipments, as well as profits, are expected to rise compared to the previous quarter.

The issues in Indonesia have kept Freeport investors on their toes over the last few quarters. You can read Freeport’s Indonesia Issues: Plot Thickens amid Layoffs to find out more about the various issues facing Freeport’s Indonesia operations.

In the next part, we’ll see how analysts are rating Freeport as 2Q17 draws to an end.


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