The sluggish copper prices affected Freeport-McMoRan Inc (NYSE:FCX) badly during the first quarter and swung it down to a rare loss position. According to reports, the company indicated that it might think of spinning-off a part of its energy business as the previous quarter was not good for this segment.
Where Is It Heading:
The primary business of Freeport is copper, which is normally used in making pipes for plumbing and wires for electronics. The previous quarter was not the best period for copper. The biggest buyer of the metal in the world is China, but due to sluggish growth in the country during the previous quarter, the demand for copper decreased which led to price cut down. While reporting its financial results, the company revealed that the price it used to charge from customers came down by 13.4% to $2.72 a pound in the last 12 months.
The net loss of Freeport in 1Q2015 was $2.38 per share or $2.47 billion in total. If these figures are compared with the last year’s data, one can find that Freeport reported a profit of 49 cents a share or $510 million in total. Total revenue of the company came down to $4.15 billion in the previous quarter, 17% less than the revenue it reported a year ago.
Freeport Hopes For The Best:
Even though the current state of the economy in China doesn’t give any sign of improvement in the near future, but still Freeport believes that it will bounce back in the near future. Once it returns to normal level, it will need a huge quantity of copper for developmental activities. China doesn’t produce copper just like it does aluminum and steel; hence, it’s a great opportunity for Freeport-McMoRan Inc (NYSE:FCX), which it will cash in sooner or later. Freeport hopes for the best and anticipates that things will fall in line sooner than later.