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Freeport-McMoRan’s 1Q18 Earnings: Reading between the Lines

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Freeport-McMoRan’s 1Q18 earnings

Freeport-McMoRan (FCX) released its 1Q18 earnings today and reported revenues of $4.8 billion. The company had posted revenues of $5.0 billion in 4Q17 and $3.3 billion in 1Q17. Freeport’s 1Q18 adjusted EPS (earnings per share) from continuing operations were $0.46, versus $0.13 in the corresponding quarter last year. Despite the sharp yearly increase, Freeport’s 1Q18 earnings fell short of expectations.

Teck Resources (TECK), the leading Canadian diversified miner, also posted its 1Q18 earnings today.

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Key takeaways

During the 1Q18 earnings release, Freeport lowered its 2018 copper shipments guidance to 3.8 billion pounds. Previously, the company had said that it expects its 2018 copper shipments to be 3.9 billion pounds. Meanwhile, along with the earnings, Freeport’s 1Q18 earnings event was closely watched for updates on its Indonesia operations. The mine, where Rio Tinto (RIO) (TRQ) is Freeport’s partner, has been in the news for an ongoing tussle between Freeport and the Indonesian government (EIDO).

Despite the optimism shown by Freeport’s management during previous earnings calls, a solution has been elusive. During the 1Q18 earnings release, Freeport said, “We continue to engage in negotiations with the Indonesian government to restore long-term stability for our Grasberg operations and look forward to reaching a mutually positive resolution.” The undertone looks less optimistic this time than late last year. We should get more updates on Freeport’s lower 2018 guidance and its negotiation with the Indonesian government on the 1Q18 earnings call.

Visit our Metals and Mining page for detailed analysis of Freeport’s 1Q18 earnings call.

And check out all the data we’ve added to our quote pages. Now you can get a valuation snapshot, earnings and revenue estimates, and historical data as well as dividend info. Take a look!

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