Freeport-McMoRan Shares Lower

Freeport-McMoRan (FCX) slipped 4.5% on Monday after the mining company said it expects to post a second-quarter loss due to lower copper prices.

Phoenix-based Freeport said it expects the mark-to-market impact of the lower prices for the industrial metal to reduce its revenue by $85 million in the quarter.

The company said it expects adjusted earnings before interest, taxes, and depreciation of $430 million for the quarter and a $0.05 per-share net loss to net income before any recurring items. Capital IQ’s consensus for unadjusted Ebitda is $762 million.

The company said copper prices on the London Metals Exchange averaged $2.77 per pound in the second quarter and that the average three-month forward price at the end of last month was $2.72 per pound. That price will be used to record provisionally priced sales that are expected to settle in the second half of the year.

Freeport said it had provisionally priced the 364 million pounds of copper from its operations to be an average $2.94 per pound, subject to final pricing over the next few months.

Freeport said it expects second-quarter copper sales to have an average price of about $2.73 a pound.

It said it expects consolidated copper sales volumes in the quarter to be 800 million pounds with higher sales from the Americas offsetting lower sales from Indonesia. Gold sales are seen at 190,000 ounces, below the April estimate of 265,000 ounces, due to changes in mine sequencing at its Grasberg open pit in Indonesia.

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