Freeport-McMoRan’s Copper Shipments Were Disappointing

Copper shipments

On April 25, Freeport-McMoRan (FCX) reported its first-quarter earnings. The company reported revenues of $3.79 billion in the first quarter—compared to $3.68 billion in the fourth quarter and $4.87 billion in the first quarter of 2018. The company’s first-quarter revenues were short of analysts’ expectations.

Freeport-McMoRan’s Copper Shipments Were Disappointing

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Freeport-McMoRan reported an adjusted EBITDA of $778 million in the first quarter. The company posted an EBITDA of $885 million in the fourth quarter and $1.93 billion in the first quarter of 2018. Freeport-McMoRan missed the first-quarter EBITDA estimates by a wide margin. The analysts polled by Thomson Reuters expected the company to post an adjusted EBITDA of $856 million in the first quarter.

Missed shipment guidance

Freeport-McMoRan missed its copper shipment guidance in the first quarter. During the fourth-quarter earnings call, Freeport-McMoRan said that it expects to ship 825,000 million pounds of copper and 255,000 ounces of gold in the first quarter. However, the company shipped 784,000 million pounds of copper and 242,000 ounces of copper in the quarter. The lower-than-expected shipments were likely the key driver behind Freeport-McMoRan’s first-quarter miss. After missing the shipment guidance in the first quarter, Freeport-McMoRan blamed “weather events at El Abra, unscheduled maintenance in North America and timing of shipments in Indonesia.” The company missed its shipment guidance in the fourth quarter.

Freeport-McMoRan missed its unit cash cost guidance and reported a copper unit cash cost after by-product credit of $1.78 per pound in the first quarter compared to its guidance of $1.73 per pound. The company also missed its unit cash cost guidance in the fourth quarter.