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FREEPORT-MCMORAN INC (FCX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 GAAP results: revenue $5.72B, net income $274M ($0.19 EPS); adjusted net income $450M ($0.31 EPS) after $176M net charges. Copper/gold sales were above October guidance and unit net cash costs came in below guidance, underscoring solid execution despite Indonesia smelter repairs .
  • Management guided FY 2025 copper sales to ~4.0B lbs, gold ~1.6M oz, moly ~88M lbs, with Q1 2025 volumes the lowest due to Indonesian mill maintenance and export permit timing; consolidated unit net cash costs guided to $1.60/lb (Q1: $2.05/lb) .
  • Indonesia smelter fire repair costs (~$100M) are covered by insurance; management expects concentrate export approval in Q1 2025 and to ramp the smelter by mid-2025, paying a 7.5% export duty on 2025 exports and zero in 2026 when fully integrated .
  • Capex stepped up: FY 2024 $4.81B and FY 2025 ~$5.0B (incl. discretionary growth, Kucing Liar and LNG), with net debt excluding smelter financing at ~$1.06B and strong balance sheet flexibility .
  • Estimate context: Q4 EPS beat consensus while revenue missed; management’s 2025 guidance changes (copper -~5%, gold +~7%) and policy catalysts (U.S. 45X critical mineral credit) are key stock drivers into 2025 .

What Went Well and What Went Wrong

What Went Well

  • Copper/gold sales exceeded October guidance; consolidated unit net cash costs of $1.66/lb beat expectations, reflecting higher by-product credits and operational execution .
  • Strong operational performance across regions: North America unit costs trending lower vs Q3; South America improved unit costs YoY; Indonesia achieved records and delivered copper cleaner circuit completion .
  • Management secured path to Q1 2025 export approval and confirmed smelter repair insurance coverage; “They’ve indicated support for allowing us to continue exports during 2025” (K. Quirk) .

What Went Wrong

  • Q4 revenue down YoY ($5.72B vs $5.91B) amid lower PT-FI ore grades/timing; unit cash costs higher YoY ($1.66 vs $1.52) on lower PT-FI sales volumes .
  • Moly sales (18M lbs) below October estimate (20M) on shipment timing; North America unit costs elevated versus South America on grade declines and longer hauls .
  • Indonesia export duty (7.5%) persists through 2025; smelter ramp-up defers full integration until late 2025, impacting near-term cost structure and cash flows .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$5,905 $6,790 $5,720
Operating Income ($USD Millions)$1,722 $1,938 $1,243
Net Income ($USD Millions)$388 $526 $274
Diluted EPS ($USD)$0.27 $0.36 $0.19
Adjusted EPS ($USD)—$0.38 $0.31
EBITDA Margin %43.0%*37.9%*36.9%*

Values marked with * retrieved from S&P Global.

Vs. Wall Street Consensus (S&P Global)

MetricQ2 2024Q3 2024Q4 2024
Primary EPS Consensus Mean0.3792*0.3698*0.2164*
Primary EPS Actual0.46*0.38*0.31*
Revenue Consensus Mean ($USD Millions)6,014.7*6,459.7*5,989.8*
Revenue Actual ($USD Millions)6,624 6,790 5,720
EBITDA Consensus Mean ($USD Millions)2,468.8*2,596.2*2,107.4*
EBITDA Actual ($USD Millions)2,623.0*2,572.0*2,112.0*

Values marked with * retrieved from S&P Global.

Segment and Volume Breakdown (Q4 2024)

SegmentCopper Sales (mm lbs)Gold Sales (k oz)Avg Realized Cu ($/lb)Avg Realized Au ($/oz)
North America318 7 $4.29 —
South America298 —$4.04 —
Indonesia (PT-FI)376 343 $4.11 $2,628
Consolidated992 350 $4.15 $2,628

KPIs (Q4 2024)

KPIValue
Consolidated Unit Net Cash Costs ($/lb)$1.66
North America Unit Net Cash Costs ($/lb)$3.04
South America Unit Net Cash Costs ($/lb)$2.36
Indonesia Unit Net Cash Costs ($/lb)$(0.08) (credit)
Operating Cash Flow ($USD Millions)$1,436

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Copper SalesFY 2025Not disclosed numerically~4.0B lbs Lowered ~5% vs prior mgmt outlook
Gold SalesFY 2025Not disclosed numerically~1.6M oz Raised ~7% vs prior mgmt outlook
Moly SalesFY 2025Not disclosed numerically~88M lbs Maintained
Copper SalesQ1 2025Not disclosed numerically850M lbs Q1 lowest due to maintenance/export timing
Gold SalesQ1 2025Not disclosed numerically225k oz As above
Moly SalesQ1 2025Not disclosed numerically22M lbs As above
Unit Net Cash CostsFY 2025Not disclosed numerically$1.60/lb; Q1: $2.05/lb Mix-shift impact; U.S. costs seen lower YoY
Operating Cash FlowFY 2025 (price case)Not disclosed numerically~$6.2B at $4.00/lb Cu, $2,700/oz Au, $20/lb Mo New modeled disclosure
CapexFY 2025~$4.2B (Oct outlook) ~$5.0B; discretionary ~$1.7B Raised; includes KL/LNG/tailings
Export DutyCY 2025—7.5% on exports Duty applies until smelter full ramp
Export DutyCY 2026—0% (no exports expected) Falls to 0% when fully integrated

Earnings Call Themes & Trends

TopicQ2 2024 (Previous Mentions)Q3 2024Q4 2024 (Current)Trend
Indonesia smelter & exportsSmelter commissioning began; licenses renewed to Dec 2024; aiming full ramp by YE 2024 Fire on Oct 14; repairs planned; seeking 2025 export continuity; insurance covers repairs Repair costs ~$100M insured; export approval expected Q1; smelter restart mid-2025; fully integrated by YE 2025 Near-term repair; pathway clear
Leach innovationRun-rate 200M lbs; targeting 300–400M by 2026; under $1/lb incremental cost Sequential Q4 step-down but on plan; targeting 300M by YE 2025 via injection/thermal covers Scaling deep raffinate injection, “leach everywhere,” heat tests; inventory of 39B lbs residual copper Scaling accelerating
U.S. cost initiatives & 45XFocus on productivity, reliability, contractor rationalization Aim for 2025 U.S. unit cost reductions; comparisons NA vs SA cost gap explained 45X mineral tax credit could be ~$500M benefit; labor stabilized; automation at Bagdad Improving cost outlook
Capex & growth pipelineFY24 capex ~$3.7B; FY25 ~$4.1B; discretionary $2.5B (Bagdad/Lone Star/El Abra/KL) Discretionary projects continue; Cerro Verde stake increased to 55.08% FY25-26 capex ~$4.4–$5.0B; discretionary $1.6–$1.7B; Bagdad tailings/LNG/Kucing Liar Investment ramp
Macro/tariffs & AI demandU.S. power/AI demand strong; China grid/EV support; copper secular demand COMEX premium vs LME; China stimulus potential; U.S. tariffs watched U.S. tariff risk manageable; U.S. price premium a benefit; focus on global growth & inflation risks Supportive demand with policy watch
Indonesia mining rights extensionRegulation allows early application; 10% transfer in 2041 at book value Preparing application; government transition slowed timing Plan to apply in 2025; engagement with new administration and MIND ID Progress continuing
M&A stanceOpportunistic; organic growth prioritized Monitoring industry deals; Cerro Verde buy more if sellers exist Prepared for opportunities; not strategy-dependent Consistent posture

Management Commentary

  • “Our operating performance in the fourth quarter was solid. Our sales and net unit costs were slightly better than our guidance going into the quarter.” — Kathleen Quirk .
  • “Annual EBITDA would range from over $11 billion per annum at $4 copper to over $15 billion per annum at $5 copper.” — Maree Robertson .
  • “We expect to recommence production by middle of this year… and expect to receive [export] approval in the first quarter.” — Kathleen Quirk .
  • “The repair cost is estimated at approximately $100 million and… covered by insurance.” — Kathleen Quirk .
  • “Our copper guidance for 2025… adjusted by approximately 5%. Our gold estimates for 2025 are about 7% higher.” — Kathleen Quirk .

Q&A Highlights

  • Indonesia exports: Management expects Q1 approval; inventories manageable; smelter restart mid-2025 with duties in 2025 and zero in 2026 .
  • U.S. 45X credit: Potential 10% operating cost credit; bipartisan support; could be ~$500M benefit; timing uncertain .
  • Discretionary capex: Bagdad tailings spend is optionality for expansion; Kucing Liar increases sustainable long-term Grasberg output; FY26 capex includes LNG; discipline emphasized .
  • Tariffs & market flows: FCX sells U.S. production domestically; U.S. COMEX premium accrues to contracts; global growth/inflation are key tariff risks .
  • Leaching trajectory: Q4 leach ~50M lbs in line with plan; targeting 300M run-rate by YE 2025 and 300–400M lbs in 2026; additive/heat pilots, AI-assisted additive discovery .

Estimates Context

  • Q4 2024: EPS 0.31 vs 0.216 consensus (beat); revenue $5.72B vs $5.99B consensus (miss); EBITDA $2.112B vs $2.107B consensus (in line/beat)*. Revenue miss reflects lower PT-FI shipments and ore grades; EPS aided by by-product credits and cost control . Values marked with * retrieved from S&P Global.
  • Q3 2024: EPS 0.38 vs 0.370 consensus (beat); revenue $6.79B vs $6.46B consensus (beat)* . Values marked with * retrieved from S&P Global.
  • Q2 2024: EPS 0.46 vs 0.379 consensus (beat); revenue $6.62B vs $6.01B consensus (beat)* . Values marked with * retrieved from S&P Global.
  • Implications: Street EPS likely revises up modestly on Q4 beat, but 2025 copper sales guidance (-~5%) and 7.5% export duty may temper revenue forecasts until smelter fully integrated .

Key Takeaways for Investors

  • Execution offset headwinds: Above-guidance Q4 sales and lower unit cash costs demonstrate operational resilience; watch Indonesian export permit and smelter ramp milestones in H1 2025 for sentiment shifts .
  • Mixed print vs consensus: Q4 EPS beat despite revenue miss; Street may recalibrate FY25 top-line on lower copper volume guidance while preserving margin expectations on by-product credits and U.S. cost reductions* . Values marked with * retrieved from S&P Global.
  • 2025 cost outlook improves: U.S. unit costs targeted lower; 45X critical mineral credit (if enacted) is a potential ~$500M tailwind to U.S. operations .
  • Capex ramp with discipline: ~$5.0B FY25 capex funds KL, LNG, Bagdad tailings optionality; balance sheet supports growth and shareholder returns under performance-based policy .
  • Indonesia integration timeline: Expect Q1 export approval, smelter repair completion by mid-2025, integrated operations by YE 2025; export duty drops to 0% in 2026, improving cost/FCF profile .
  • Leach program is a structural differentiator: Sub-$1/lb incremental cost copper with targeted 300M lbs run-rate by YE 2025 and 300–400M lbs in 2026 enhances Americas margins and optionality .
  • Near-term trading catalysts: Indonesia export approval announcement, smelter restart updates, U.S. tariff policy and 45X progress, and any revision to quarterly volume/cost outlooks on Q1 maintenance .