Freeport-McMoRan reports EPS in-line, revs in-line; raises cash flow guidance; still in talks to sell assets
- Reports Q1 (Mar) loss of $0.16 per share, excluding $3.19/share in charges, in-line with the Capital IQ Consensus of ($0.16); revenues fell 15.1% year/year to $3.53 bln vs the $3.52 bln Capital IQ Consensus.
- Consolidated sales totaled 1.1 billion pounds of copper, 201 thousand ounces of gold, 17 million pounds of molybdenum and 12.1 million barrels of oil equivalents (MMBOE) for first-quarter 2016, compared with 960 million pounds of copper, 263 thousand ounces of gold, 23 million pounds of molybdenum and 12.5 MMBOE for first-quarter 2015.
- Consolidated sales for the year 2016 (adjusted for the anticipated closing of the Morenci transaction in second-quarter 2016) are expected to approximate 5.0 billion pounds of copper, 1.85 million ounces of gold, 71 million pounds of molybdenum and 54.4 MMBOE, including 1.15 billion pounds of copper, 195 thousand ounces of gold, 19 million pounds of molybdenum and 13.5 MMBOE for second-quarter 2016. Average realized prices were $2.17 per pound for copper, $1,227 per ounce for gold and $29.06 per barrel for oil for first-quarter 2016. Consolidated unit net cash costs averaged $1.38 per pound of copper for mining operations and $15.85 per barrel of oil equivalents (BOE) for oil and gas operations for first-quarter 2016. Consolidated unit net cash costs for the year 2016 are expected to average $1.05 per pound of copper for mining operations and $15 per BOE for oil and gas operations.
- Capital expenditures for oil and gas operations for the year 2016 are estimated to total $1.5 billion, excluding $0.8 billion in idle rig costs (which reduce operating cash flows). ~90 percent of the 2016 capital budget is expected to be directed to the GOM.
- Operating cash flows for the year 2016 are expected to ~$4.8 bln, up from $3.4 bln (including $0.8 billion in working capital sources and changes in other tax payments). Capital expenditures are expected to ~$3.3 bln for FY16, down from $3.4 bln, consisting of $1.8 billion for mining operations (including $1.4 billion for major projects) and $1.5 billion for oil and gas operations.
- FCX continues to advance discussions for the sale of certain interests in its mining and oil and gas assets to accelerate its debt reduction initiatives. While the process did not identify a buyer for the entire oil and gas business, a number of parties have interest in select assets, and FCX continues to engage in discussions with parties interested in potential asset or joint venture transactions. In the interim, FCX is taking immediate steps to reduce oil and gas costs further.