Freeport McMoRan Swings to Profit on Lower Costs

Metals producer Freeport-McMoRan swung to a second-quarter profit, partly by keeping costs down.
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Freeport McMoRan  (FCX) - Get Report, the world’s largest publicly traded copper producer, swung to a second-quarter profit from a year-earlier loss, partly on expense reduction.

The Phoenix company posted net income of $53 million, or 3 cents a share, for the quarter, compared with a loss of $72 million, or 5 cents a share, in the year-earlier period.

Adjusted net income totaled $44 billion, or 3 cents a share, in the latest quarter, swinging from a loss of 58 million, or 4 cents, in the year-ago quarter. 

The adjusted earnings matched the top of analysts’ forecasts, according to a survey by FactSet.

Revenue fell 14% to $3.05 billion. That was short of the FactSet consensus estimate of $3.13 billion.

The company benefited from a 22% cost and expense reduction, triggered by the coronavirus pandemic

Freeport produced 767 million pounds of copper in the latest quarter, down 1.2% from a year earlier. Gold output climbed 19% to 191,000 ounces.

Freeport’s average price for selling copper dipped 7.7%, despite a 22% increase in market prices, Reuters reported.

“With the imminence of significantly higher production volumes, we have momentum to strengthen our balance sheet, increase returns to shareholders and grow our business in the coming years,” Freeport Chief Executive Richard Adkerson said in a statement.

Freeport said earlier this month that it had no amounts drawn under its $3.5 billion revolving credit facility as of June 30. 

Total consolidated debt is estimated at $9.9 billion, and consolidated cash is estimated at $1.5 billion.

Earlier this year, Freeport unveiled $1.3 billion of cost cuts, including layoffs and delays for expansion projects.

Freeport recently traded at $13.44, down 1.4%. The stock has gained 3% so far this year.