Freeport-McMoRan Inc(NYSE:FCX) recently posted its 3Q2016 earnings, and as per the reported numbers investors should be delighted with the progress the firm is recording on its balance sheet. Many experts were positive on the stock when the price was below $8 per share earlier in this year. However, the buy ratings were initiated mentioning the risks that surrounded the firm.
The highlights
Gold and copper miner Freeport-McMoRan recently announced its quarterly report in which it missed revenues as well as earnings projections. However, post-result, the shares traded in green, and that actually was reasonable.
The company posted 3Q2016 profit of $217 million as against to a loss of $3.83 billion, a year earlier. Last year profit was hurt by impairment charges of $3.65 billion. Leaving the impact of one-off items, the firm recorded profit of $0.13 per share compared to a loss of $0.15 per share recorded in comparable period a year ago. This came below analysts’ projection of EPS of $0.20. Freeport-McMoRan revenue came at $3.88 billion compared to $3.38 billion, a year ago, also below analysts’ target of $3.96 billion.
The pioneer mining firm by market cap in the U.S. benefited from a growth in production, although the total output was low compared to given projections. Gold and copper sales in 3Q2016 came in at 317,000 ounces and 1.23 billion pounds, registering gains of 7.8% and 23%, respectively over the last year. The robust growth in copper output can be attributed to higher production from Cerro Verde mine. Still, the output failed to meet the Freeport-McMoRan’s copper output projection of 1.3 billion pounds and that of gold at 410,000 ounces.
With output failing to meet the projections, Freeport-McMoRan has revised its full year projection. In 2016, the firm now projects copper output at 4.8 billion pounds and that of gold at 1.26 million ounces. Previously, it targeted copper output of 5 billion pounds and that of gold at 1.7 million ounces. Freeport-McMoRan gained from the stronger gold prices which has appreciated around 20% so far in this year. The realized price for the gold in 3Q2016 surged 18.8% to $1,327 per ounce from the same quarter in 2015.
