Freeport-McMoRan expects Q2 loss, cuts gold sales outlook
Freeport-McMoRan said on Monday it expects to report a loss in the second quarter, hit by lower gold production, weaker copper prices and higher costs, sending the US miner's shares down nearly 6%.
The shares were further pressurized as gold prices fell following signs of easing trade tensions between the United States and China that reduced the attraction of safe-haven assets.
Freeport also cut its gold sales outlook for the quarter ended June 30 to about 190 000 oz from 265 000 oz.
The company has undertaken a project to expand Indonesia's massive Grasberg copper and gold mines, it partly owns, from an openpit to an underground operation, a complex process that is necessary to help fix an erosion in production at the mines.
In the second quarter, Freeport expects a loss of 5 cents per share and an adjusted Ebitda of about $430-million. Same quarter last year, the company earned a profit of 59 cents per share.
Analysts at Jefferies were expecting a profit of 16 cents per share for the quarter. "We expect FCX shares to be volatile in the near term as the market will likely focus more on the negatives of the bad second quarter," they said.
The world's largest publicly traded copper miner said it expected lower copper prices in the quarter and reduced revenue by about $85-million.
Freeport also expects net cash cost to be about 15% higher than its previous estimates of $1.67/lb of copper.
The company is expected to report quarterly results on July 24.
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