25 Jul

Freeport-McMoRan’s Q2 2018 Beat: Don’t Celebrate Just Yet

WRITTEN BY Mark O'Hara FEATURED IN Post-Release Earnings Reports

Freeport’s second-quarter earnings beat

Freeport-McMoRan (FCX), the largest US-based copper miner, released its second-quarter earnings today.

Antofagasta (ANTO) and Glencore (GLNCY) also reported their quarterly production data today. BHP Billiton (BHP) and Rio Tinto (RIO) have already released their quarterly production data.

Freeport-McMoRan’s Q2 2018 Beat: Don’t Celebrate Just Yet

In the second quarter, Freeport managed to beat analysts’ estimates on both the top and bottom lines. The company’s second-quarter copper shipments were higher than its guidance, helping it to post better-than-expected revenue. However, the company’s gold volumes were lower than its guidance, which it attributed to the timing of shipments. Freeport rose in premarket trading on its earnings beat.

Grasberg issues

Previously, there had been apprehension about whether Freeport’s agreement with Rio Tinto and the Indonesian government was binding or not. Now, Freeport’s earnings release has specifically deemed the agreement as nonbinding.

In other news related to Freeport’s Grasberg operations, Reuters reported today that “Indonesia’s parliament has asked the government to recalculate damage to the environment from the giant Grasberg copper mine operated by the local unit of Freeport McMoRan Inc.” The report also says that the Indonesian parliament has asked the country’s environment minister to “ensure that PT FI fulfils governmental administrative penalties.”

For Freeport’s investors, Grasberg concerns are a challenge that a cent or two of impressive earnings can’t dilute. We’ll get more details about Freeport’s agreement with the Indonesian government during its earnings call today.

We’ll follow up with a detailed analysis of Freeport’s earnings soon. Keep an eye on our Basic Materials page for ongoing updates on copper miners.

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