Freeport-McMoRan’s Q4 earnings

Freeport-McMoRan (FCX) is expected to release its fourth-quarter results on January 24. Analysts expect Freeport to post revenue of $3.84 billion in the fourth quarter, representing a sequential fall from $4.9 billion and a YoY (year-over-year) fall from $5.0 billion.Freeport-McMoRan’s Q4 Earnings: The Word on Wall Street

Fewer shipments

For commodity producers such as Rio Tinto (RIO), Vale (VALE), and BHP (BHP), revenue is a function of shipments and commodity prices. In the fourth quarter, Freeport expects its copper shipments to fall YoY to 790 million pounds from 1,044 million pounds. It should be noted that Freeport pulled some production from the fourth quarter into the third quarter, resulting in higher-than-expected earnings in the third quarter.

Like copper prices (XME) in the third and fourth quarters, Freeport’s copper shipments are expected to fall 24.3% sequentially. The company’s final selling prices could depend on several factors, including sales timing.

Earnings

In the fourth quarter, Freeport’s adjusted EBITDA are expected to fall YoY to $1.1 billion from $1.8 billion, dragged down by copper and gold shipments falling. Freeport’s earnings could fall sharply this year as its Grasberg mine transitions from overground to underground operations, leading to lower production. In the next article, we’ll look at the key updates markets may watch for in Freeport’s fourth-quarter earnings call.

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