| Why Freeport-McMoRan’s 3Q15 Revenues Fell Off a Cliff | |
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A Closer Look at Freeport-McMoRan’s 3Q15 Earnings (Continued from Prior Part) 3Q15 revenues
Revenues for commodity companies like BHP Billiton (BHP) and Vale (VALE) are a function of commodity (COMT) prices and shipments. Shipments depend on demand from end consumers as well as any portfolio actions undertaken by a company. Commodity prices are decided by market forces that in turn depend on demand and supply as well as prevailing sentiment. In this part of the series, we’ll explore the trend in Freeport-McMoRan’s (FCX) revenues.
Revenues fall
- Freeport-McMoRan reported revenues of $3.7 billion in 3Q15, a year-over-year (or YoY) decline of more than 35%. The graph above shows the falling trend in Freeport-McMoRan’s revenues.
- In 3Q15, Freeport-McMoRan sold 1.0 billion pounds of copper, 23 million pounds of molybdenum, 13.8 MMBOE (or million barrels of oil equivalents), and 294,000 ounces of gold.
- The company’s sales volumes fell year-over-year for copper and gold while energy and molybdenum volumes rose over the period. Copper producers like Freeport-McMoRan and Glencore (GLNCY) have cut production in an attempt to contain copper supply.
- Freeport-McMoRan reported average realized prices of $2.38 per pound for copper, $1,117 per ounce for gold, and $55.88 per barrel for oil. Please note that realized oil prices also include an $11.03 per barrel cash gain on derivative contracts. Freeport-McMoRan’s average realized copper and energy prices have respectively fallen 23.7% and 36.9% YoY.
Investors looking for direct exposure to copper can also consider the PowerShares DB Base Metals ETF (DBB). DBB invests one-third of its holdings in copper.
Outlook
- For 4Q15, Freeport-McMoRan has given guidance of 1.1 billion pounds of copper, 21 million pounds of molybdenum, 13.3 MMBOE, and 310,000 ounces of gold.
- However, its 4Q15 revenues will also depend on how commodity prices play out in the next two months.
Continue to Next Part Browse this series on Market Realist:
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VanEck Vectors Global Alternative Energy ETF
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PRODUCER |
CODE : FCX |
ISIN : US35671D8570 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Freeport McMoran is a copper and gold producing company based in United states of america. Freeport McMoran produces copper, gold, cobalt, molybdenum and silver in Chile, in Congo Dem. Rep. of, in Indonesia and in Peru, develops copper in Peru, and holds various exploration projects in Chile. Its main assets in production are CANDELARIA, EL ABRA, CHINO - MILL, HENDERSON, MIAMI - ROM LEACH, MORENCI - MILL, OJOS DEL SALADO, MORENCI and MORENCI - ROM LEACH in Chile, GRASBERG, SIERRITA and BAGDAD in Indonesia, TENKE FUNGURUME and TYRONE in Congo Dem. Rep. of and CERRO VERDE in Peru, its main asset in development is SAFFORD in Peru and its main exploration properties are BAGDAD - ROM LEACH and CHINO - ROM LEACH in Peru and CERRO VERDE - MILL, CERRO VERDE - CRUSHED LEACH, CERRO VERDE - ROM LEACH, EL ABRA - ROM LEACH and CLIMAX in Chile. Freeport McMoran is listed in Germany and in United States of America. Its market capitalisation is 2.4 billions as of today (€ 2.1 billions). Its stock quote reached its lowest recent point on March 06, 2020 at 10.00, and its highest recent level on October 10, 2024 at 49.54. Freeport McMoran has 47 442 200 shares outstanding. |