Surging Oil and Gas Production Fuels Earnings Beat for Freeport-McMoRan Copper & Gold Inc.

Freeport-McMoRan (NYSE: FCX  ) reported first-quarter results before the market opened this morning. The copper, gold and energy producer delivered revenue of $4.98 billion and earnings of $510 million or $0.49 per share. While this was less than the $648 million, or $0.68 per share, the company earned in the first quarter of last year, earnings did beat analysts' estimates by $0.08 per share.

Freeport-McMoRan sold 871 million pounds of copper, 187,000 ounces of gold, 27 million pounds of molybdenum and 16.1 million barrels of oil equivalent, or BOE, on the quarter. However, copper and gold sales were below last year's first quarter when the company sold 954 million pounds of copper and 214,000 ounces of gold, respectively. In addition to that, realized prices for both of those metals were lower year-over-year. Average realized prices for Q1 were $3.14 per pound for copper (compared with $3.51 in the year-ago quarter) and $1,300 per ounce for gold (compared with $1,606 in the year-ago quarter), according to the company. 

The addition of the company's energy business, which it acquired last year, really helped to offset the year-over-year declines in copper and gold volume and realized prices. The energy business continues to outperform expectations as production was 16.1 million BOE, which was much higher than guidance of 15.3 million BOE. Higher production in the Eagle Ford Shale along with continued strong performance in the Gulf of Mexico and stable production in California, when combined with lower costs, enabled Freeport-McMoRan's energy business to outperform expectations. 

Freaport-McMoRan's product diversity enabled it to overcome many obstacles in the quarter, including issues with copper exports in Indonesia as well as weaker copper and gold prices. The company believes its portfolio will continue to generate solid cash flow this year, which will enable it to substantially reduce its debt, while also delivering value to its investors. 

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2927760, ~/Articles/ArticleHandler.aspx, 9/2/2015 4:55:34 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Matt DiLallo

Matthew is a Senior Energy and Materials Specialist with The Motley Fool. He graduated from the Liberty University with a degree in Biblical Studies and a Masters of Business Administration. You can follow him on Twitter for the latest news and analysis of the energy and materials industries:

Today's Market

updated 7 hours ago Sponsored by:
DOW 16,058.35 -469.68 -2.84%
S&P 500 1,913.85 -58.33 -2.96%
NASD 4,636.11 -140.40 -2.94%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/1/2015 4:03 PM
FCX $9.77 Down -0.87 -8.18%
Freeport-McMoRan C… CAPS Rating: ****