Freeport-McMoRan (NYSE:FCX) announced second-quarter results before the market opened this morning. The global resources company reported revenue of $5.52 billion and net income of $482 million, or $0.46 per share. While revenue beat estimates by $280 million, net income missed estimates by $0.03 per share.
One of the reasons net income fell a little short was because Freeport-McMoRan took $130 million, or $0.12 per share, in charges in the quarter. These charges were due to environmental obligations and related litigation charges, deferred taxes and mark-to-market losses on oil and gas derivative contracts.
In addition to that, copper sales also came in a bit lower than estimated at 968 million pounds. Freeport-McMoRan previously estimated that it would sell 1.1 billion pounds of copper in the quarter as it expected to resume exports in May from PT-FI, which is the company's Indonesian affiliate. Those exports did not resume as planned, though the company says it is encouraged by the discussions it is having with the Indonesian government, which should yield a near-term agreement that will enable Freeport-McMoRan to resume exports.
The delay, which caused lower sales volumes in Indonesia, also affected Freeport-McMoRan's copper production costs in the quarter. While average unit net cash costs fell year-over-year to $1.72 per pound in the quarter that was higher than the $1.58 per pound the company had estimated.
Despite delays in Indonesia, Freeport-McMoRan delivered strong operating performance in the second quarter. The company commenced copper production at its newly expanded Morenci operation and achieved important progress in its mining and oil and gas development projects around the world. The company continues to remain focused on pursing opportunities that increase value for shareholders and sees its current development projects delivering future growth in production, cash flow and returns.