World's Largest Copper Producer Freeport Estimates Proposed Tariffs Could Raise US Cost Of Goods Purchased By 5%

Freeport-McMoRan Inc. (NYSE:FCX), the world's largest copper producer, shares rose in early trading Thursday after the company reported first-quarter FY25 results.

Revenue stood at $5.73 billion, beating the consensus of $5.44 billion. Copper sales volumes totaled 872 million pounds, which exceeded the January 2025 estimate.

Copper sales declined year-over-year due to a major maintenance project planned in Indonesia.

Adjusted EPS was $0.24, which is in line with the consensus.

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Copper's average realized price per pound was $4.44, and production totaled 868 million pounds in the first quarter of FY25.

Gold sales were 128 thousand ounces, lower than the January 2025 estimate and down from last year due to the timing of shipments. The average realized price per ounce stood at $3,072 in the quarter. 

Operating income stood at $1.303 billion versus $1.634 billion a year ago.

Operating cash flow for the quarter totaled $1.06 billion, compared to $1.90 billion a year ago.

As of March 31, Freeport-McMoRan had $4.4 billion in cash and equivalents, and its consolidated debt totaled $9.4 billion.

Kathleen Quirk, president and chief executive officer, said, "We remain vigilant in our efforts to reduce costs, improve efficiencies and carefully manage operating, administrative and capital spending in this uncertain macroeconomic environment."

2025 Outlook: Freeport-McMoRan expects sales volumes of 4.0 billion pounds of copper, 1.6 million ounces of gold, and 88 million pounds of molybdenum. 

Excluding the potential impacts of tariffs, the company projects a decline in its average unit net cash costs (net of by-product credits) for U.S. copper mines for the remainder of 2025 and into 2026, compared to 2024 levels.

This reduction is expected due to efficiencies, higher volumes, and ongoing cost-reduction initiatives.

U.S. copper mine cash costs are projected at ~$3.02/lb for 2025, assuming current sales volumes, cost estimates, and an average molybdenum price of $20.00 per pound for the rest of the year.

The company expects operating cash flows of ~$7 billion and capital expenditure of $4.4 billion in 2025.

Freeport estimates that the proposed tariffs could raise the cost of goods it purchases in the U.S. by around 5%, mainly due to the pass-through effect of tariffs incurred by suppliers.

Investors can gain exposure to the stock via the Sprott Copper Miners ETF (NASDAQ:COPP) and the Themes ETF Trust Themes Copper Miners ETF (BATS:COPA).

Price Action: FCX shares are up 6.69% at $37.55 at the last check on Thursday.

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