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Inside Freeport-McMoRan’s 4Q17 Revenue Beat

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Aug. 18 2020, Updated 9:33 a.m. ET

Freeport-McMoRan’s 4Q17 revenue beat

Freeport-McMoRan (FCX) posted revenues of $5.0 billion in 4Q17. The company posted revenues of $4.3 billion in 3Q17 and $4.4 billion in 4Q16. Freeport managed to beat its 4Q17 revenue estimates by a wide margin. Analysts polled by Thomson Reuters expected Freeport to post revenues of $4.7 billion in 4Q17. However, the conservative estimates were on the lower side. Read Are Analysts’ Estimates for Freeport’s Revenue Conservative? to learn more. Notably, 4Q17 is the second quarter that Freeport’s revenues exceeded analysts’ estimates by a wide margin.

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Key drivers

For copper miners like Southern Copper (SCCO) and First Quantum Minerals (FM), revenues depend on shipments and average copper prices (ANTO) (GLEN-L). Freeport sold 1 billion pounds of copper, 593,000 ounces of gold, and 24 million pounds of molybdenum in 4Q17. To put this in context, consider that Freeport sold 932 million pounds of copper, 355,000 ounces of gold, and 22 million pounds of molybdenum in 3Q17. Shipments of all three commodities increased compared to the sequential quarter.

Average selling prices

Freeport reported average realized prices of $3.21 per pound for copper, $1,285 per ounce for gold, and $9.79 per pound for molybdenum in 4Q17. It reported average realized prices of $2.94 per pound for copper, $1,290 per ounce for gold, and $9.22 per pound for molybdenum in 3Q17. While Freeport’s average realized gold prices fell slightly compared to 3Q17, Freeport reported a 9.2% sequential increase in average realized copper prices.

Along with revenues, higher copper prices boosted Freeport’s 4Q17 profits and cash flows, which we’ll discuss in the next part.

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