Copper Prices Propel Freeport-McMoRan to Beat Analyst Estimates
A surge in copper prices has helped Freeport-McMoRan exceed analysts’ expectations, despite a decline in production. The company’s third-quarter profit, announced on Tuesday, was driven by higher average copper prices, which rose to $4.30 per pound from $3.80 per pound the previous year.
Demand from China Boosts Copper Prices
Signs of increased demand from China, the world’s largest consumer of copper, have contributed to the price hike. Falling inventories and the country’s extensive stimulus measures to revive its economy have also played a role in driving up copper prices.
Production Setbacks
However, Freeport-McMoRan’s copper production took a hit, falling to 1.05 billion recoverable pounds from 1.09 billion recoverable pounds the previous year. A recent fire at the company’s new smelter in Indonesia caused a further production delay, forcing Freeport to postpone sales of refined copper until the second quarter of 2025.
Reduced Capital Expenditure Forecast
In light of the production setbacks, Freeport-McMoRan has lowered its full-year capital expenditure forecast from $4.7 billion to $4.6 billion. Despite this, the company’s shares saw a 1.3% increase, reaching $48.55 before the bell.
Adjusted Earnings Beat Analyst Estimates
On an adjusted basis, Freeport-McMoRan earned 38 cents per share in the third quarter, outperforming the average analyst estimate of 35 cents per share. This earnings beat is a testament to the company’s ability to navigate production challenges and capitalize on favorable market conditions.
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