10-QPeriod: Q1 FY2011

FREEPORT-MCMORAN INC Quarterly Report for Q1 Ended Mar 31, 2011

Filed May 6, 2011For Securities:FCX

Summary

Freeport-McMoRan Inc. (FCX) reported strong financial results for the first quarter of 2011, driven by higher commodity prices, particularly for copper and gold. Revenues increased significantly to $5.71 billion from $4.36 billion in the prior year's quarter, leading to a substantial rise in net income attributable to common stockholders to $1.50 billion ($1.57 per diluted share) compared to $897 million ($1.00 per diluted share) in Q1 2010. The company's operational performance was robust, with increased production volumes in several key areas. Despite a slight decrease in copper sales volume, higher average realized prices for copper ($4.31/lb vs. $3.42/lb) and gold ($1,399/oz vs. $1,110/oz) significantly boosted revenues. The company also demonstrated effective cost management, with unit net cash costs for copper mines remaining competitive. FCX ended the quarter with a strong liquidity position, including over $4 billion in cash and cash equivalents. Looking ahead, FCX anticipates continued favorable market conditions for copper, supported by supply limitations and global demand. The company's outlook for 2011 projects significant operating cash flows, underscoring its financial strength and ability to manage its substantial capital expenditures and debt obligations. The company also announced a supplemental dividend, signaling confidence in its financial health and commitment to shareholder returns.

Financial Highlights

44 data points
Beta

Net Income

$1.50B

EPS (Diluted)

$1.57

Total Assets

$31.01B

Cash & Equivalents

$4.09B

Free Cash Flow

$2.36B

Financial Statements
Beta
Cost of Revenue$2.61B
SG&A Expenses$114.00M
Operating Expenses$2.77B
Operating Income$2.94B
Interest Expense$98.00M
Net Income$1.50B
EPS (Basic)$1.58
EPS (Diluted)$1.57
Shares Outstanding (Basic)946.00M
Shares Outstanding (Diluted)955.00M

Key Highlights

  • 1Revenues surged to $5.71 billion in Q1 2011, up from $4.36 billion in Q1 2010, primarily due to higher commodity prices.
  • 2Net income attributable to common stockholders increased to $1.50 billion ($1.57 per diluted share) from $897 million ($1.00 per diluted share) year-over-year.
  • 3Average realized copper price increased to $4.31/lb from $3.42/lb, and average realized gold price rose to $1,399/oz from $1,110/oz.
  • 4The company generated strong operating cash flow of $2.4 billion in Q1 2011, an increase from $1.8 billion in Q1 2010.
  • 5Consolidated cash and cash equivalents stood at $4.1 billion as of March 31, 2011, providing a solid liquidity position.
  • 6FCX expects continued positive long-term outlook for copper, supported by supply constraints and global demand.
  • 7The company announced a supplemental dividend of $0.50 per share in April 2011, reflecting confidence in financial performance.

Frequently Asked Questions

FCX experienced significant growth in both revenue and profitability. Revenues increased by approximately 30.9% to $5.71 billion in Q1 2011 from $4.36 billion in Q1 2010. Net income attributable to common stockholders rose by approximately 67.1% to $1.50 billion ($1.57 per diluted share) from $897 million ($1.00 per diluted share).

The primary drivers were higher average realized prices for key commodities, particularly copper and gold. The average realized copper price increased from $3.42 per pound in Q1 2010 to $4.31 per pound in Q1 2011, and the average realized gold price rose from $1,110 per ounce to $1,399 per ounce over the same period. Improved operational efficiency and strong sales volumes also contributed.

FCX views the long-term outlook for copper positively, citing supply limitations and ongoing global demand. For 2011, the company projects significant operating cash flows, estimating them to be greater than budgeted capital expenditures, debt payments, and dividends. The company anticipates continued volatility in commodity prices but expects favorable underlying fundamentals for copper.

FCX maintained a strong liquidity position with over $4.1 billion in cash and cash equivalents as of March 31, 2011. The company demonstrated proactive debt management by redeeming $1.1 billion of its 8.25% Senior Notes in April 2011. It also entered into a new $1.5 billion senior unsecured revolving credit facility. FCX has no significant debt maturities in the near term and continues to review opportunities for debt prepayment.