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What the Markets Want to Hear in Freeport’s 2Q17 Earnings Call

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Freeport’s 2Q17 earnings call

In the previous parts of this series, we saw what analyst are projecting for Freeport-McMoRan’s (FCX) 2Q17 earnings. In this part, we’ll look at the key updates the markets will most likely watch in the company’s 2Q17 earnings call.

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Grasberg issues

The Grasberg mine issues have dominated Freeport’s earnings conference calls for the last couple of quarters. Grasberg issues cropping up in Freeport’s earnings calls are hardly surprising. The mine is a key driver of the company’s shipments and contributes significantly to its profits. However, issues ranging from a labor impasse to frictions with the Indonesian government have hit Freeport’s Indonesian operations (EIDO).

Notably, Freeport stock has underperformed some of the other copper miners such as Southern Copper (SCCO) and Glencore (GLNCY) in 2017, primarily due to concerns about Freeport’s Indonesian operations. As noted previously, Freeport was barred from exporting copper concentrates from Indonesia for almost three months this year. The current export permit would allow the company to export concentrates only until October. During the company’s 1Q17 earnings call, the markets looked at cues from Freeport’s management on how its talks are progressing with the Indonesian government.

Copper markets

Copper prices have seen some volatility recently on fluctuations in LME (London Metals Exchange) copper inventory. During the company’s 2Q17 earnings call, it will be interesting to hear Freeport’s views on the copper markets (RIO). Specifically, the markets could watch what the second-largest copper miner has to say on the copper market balance for 2017. While some of the brokerages are projecting a copper market deficit for 2017, others see a new supply hitting the markets in the near term.

In the next and final part of this series, we’ll see how analysts are rating Freeport-McMoRan ahead of its 2Q17 earnings release.

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