| Freeport-McMoRan’s 3Q15 Margins Fall on Lower Commodity Prices | |
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A Closer Look at Freeport-McMoRan’s 3Q15 Earnings (Continued from Prior Part) Margins
Previously in this series, we’ve explored the trend in Freeport-McMoRan’s (FCX) sales profile and unit production costs. We’ve also noted that the company’s average selling prices dropped in 3Q15 on falling commodity (COMT) prices. In this part, we’ll look at the trend in Freeport-McMoRan’s cash operating margins. Cash operating margins are a key metric for mining companies, including Teck Resources (TCK) and Turquoise hill Resources (TRQ).
Currently, Freeport-McMoRan forms 0.08% of the SPDR S&P 500 ETF (SPY).
Energy margins drop
- Freeport-McMoRan recorded a cash operating margin of $24.15 per BOE (barrel of oil equivalent) in its energy business. In 2Q15, the company had a cash operating margin of $31 per BOE.
- Although Freeport-McMoRan has been able to bring down its unit cash costs in the energy business, its average realized prices fell at an even steeper pace. This fall resulted in lower operating margin per BOE.
- The energy business generated an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $304 million in 3Q15 compared to $368 million in the previous quarter.
- On a consolidated basis, Freeport-McMoRan generated an adjusted EBITDA of $937 million. In 2Q15, Freeport-McMoRan had posted an adjusted EBITDA of $1.2 billion.
Outlook
- Freeport-McMoRan expects to cut its unit cost costs in its copper operations by more than 20% next year. If copper prices don’t fall, the company’s operating margins in copper could expand next year.
- According to Freeport-McMoRan, it’s reviewing its copper operations with an assumption of $2-per-pound copper prices. The company wants to ensure that it can be cash-flow-profitable at $2-per-pound copper prices.
Freeport-McMoRan’s surging debt levels and falling operating cash flow have been a concern for investors. In the next part of this series, we’ll discuss Freeport-McMoRan’s 3Q15 performance on these metrics.
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Freeport McMoRan Copper and Gold Inc.
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PRODUCTEUR |
CODE : FCX |
ISIN : US35671D8570 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
Freeport McMoran est une société de production minière d'or et de cuivre basée aux Etats-Unis D'Amerique. Freeport McMoran est productrice d'or, de cuivre, d'argent, de cobalt et de molybdène au Chili, au Perou, en Indonesie et en Republique Democratique Du Congo, en développement de projets de cuivre au Perou, et détient divers projets d'exploration au Chili. Ses principaux projets en production sont CANDELARIA, EL ABRA, CHINO - MILL, HENDERSON, MIAMI - ROM LEACH, MORENCI - MILL, OJOS DEL SALADO, MORENCI et MORENCI - ROM LEACH au Chili, GRASBERG, SIERRITA et BAGDAD en Indonesie, TENKE FUNGURUME et TYRONE en Republique Democratique Du Congo et CERRO VERDE au Perou, son principal projet en développement est SAFFORD au Perou et ses principaux projets en exploration sont BAGDAD - ROM LEACH et CHINO - ROM LEACH au Perou et CERRO VERDE - MILL, CERRO VERDE - CRUSHED LEACH, CERRO VERDE - ROM LEACH, EL ABRA - ROM LEACH et CLIMAX au Chili. Freeport McMoran est cotée aux Etats-Unis D'Amerique et en Allemagne. Sa capitalisation boursière aujourd'hui est 69,9 milliards US$ (65,2 milliards €). La valeur de son action a atteint son plus bas niveau récent le 06 mars 2020 à 10,00 US$, et son plus haut niveau récent le 24 avril 2024 à 48,24 US$. Freeport McMoran possède 1 448 000 000 actions en circulation. |