Freeport-McMoran Copper & Gold Inc. Earnings: Margins Shrink as Profit Drops

S&P 500 (NYSE:SPY) component Freeport-McMoran Copper & Gold Inc. (NYSE:FCX) saw profit fall amid falling revenue. Freeport-McMoRan Copper & Gold is an international company that mines copper, gold and molybdenum.

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Freeport-McMoran Copper & Gold Earnings Cheat Sheet for the First Quarter

Results: Net income for Freeport-McMoran Copper & Gold Inc. fell to $764 million (80 cents per share) vs. $1.5 billion ($1.57 per share) a year earlier. This is a decline of 49% from the year-earlier quarter.

Revenue: Fell 19.3% to $4.61 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Freeport-McMoran Copper & Gold Inc. fell short of the mean analyst estimate of 85 cents per share. Analysts were expecting revenue of $4.54 billion.

Quoting Management: James R. Moffett, Chairman of the Board, and Richard C. Adkerson, President and Chief Executive Officer, said, “Our first-quarter results reflect strong performance at our North and South America operations and in Africa. We progressed in restoring normal operations at our Grasberg operations in Indonesia. During the quarter, we advanced our growth projects, which are targeted to increase our annual copper production by over 25 percent over the next three to four years.”

Key Stats:

Gross margins fell 13.3 percentage points to 40.1%. The contraction appeared to be driven by falling revenue, as the figure fell 19.3% from the year earlier while costs rose 3.7%.

The company’s net income has now fallen for three straight quarters. In the fourth quarter of the last fiscal year, net income fell 58.7% from the year earlier, while the figure fell 10.6% in the third quarter of the last fiscal year.

The company fell short of estimates last quarter after beating the mark the quarter before with net income of 67 cents versus a mean estimate of net income of 64 cents per share.

Revenue has declined for two quarters in a row. In the fourth quarter of the last fiscal year, revenue declined 25.7% to $4.16 billion from the year-earlier quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the second quarter has moved down from $1.02 a share to 94 cents over the last ninety days. At $4.13 per share, the average estimate for the fiscal year has fallen from $4.71 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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