Why Is Freeport-McMoRan (FCX) Up 6.2% Since Last Earnings Report?

A month has gone by since the last earnings report for Freeport-McMoRan (FCX). Shares have added about 6.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Freeport-McMoRan due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Freeport's Earnings and Revenues Surpass Estimates in Q1

Freeport recorded net income (attributable to common stock) of $473 million or 32 cents per share in first-quarter 2024, down around 29% from $663 million or 46 cents in the year-ago quarter.Barring one-time items, adjusted earnings per share were 32 cents, topping the Zacks Consensus Estimate of 27 cents.Revenues rose roughly 17% year over year to roughly $6.32 billion. The figure also surpassed the Zacks Consensus Estimate of around $5.66 billion. The company witnessed higher copper sales in the reported quarter. It also benefited from higher gold prices and lower costs.

Operational Highlights

Copper production rose around 12% year over year to 1,085 million pounds in the reported quarter. The figure was ahead of our estimate of 1,025 million pounds.Consolidated sales climbed around 33% year over year to 1,108 million pounds of copper. The figure was higher than our estimate of 1,001 million pounds. The upside can be attributed to higher mining and milling rates and ore grades at PT-FI.The company sold 568,000 ounces of gold, up around 110% year over year. Freeport also sold 20 million pounds of molybdenum, up around 5% year over year, in the reported quarter.Consolidated average unit net cash costs per pound of copper were $1.51, down from $1.76 a year ago. The figure was lower than our estimate of $1.55.The average realized price for copper was $3.94 per pound, down around 4% year over year. The figure was higher than our estimate of $3.81 per pound. The average realized price per ounce for gold rose around 10% year over year to $2,145. The figure was above our estimate of $2,019.

Financial Position

Cash and cash equivalents at the end of the quarter were around $5.21 billion, down around 24% year over year. The company’s total debt was roughly $9.43 billion, down around 2% year over year.Cash flows provided by operations were $1.9 billion for the reported quarter, up around 81% year over year.

Guidance

Freeport expects consolidated sales for 2024 to be approximately 4.15 billion pounds of copper, 2 million ounces of gold and 84 million pounds of molybdenum. This includes an estimated 1 billion pounds of copper, 500,000 ounces of gold, and 21 million pounds of molybdenum in the second quarter of 2024.The unit net cash costs for copper are expected to average $1.57 per pound for 2024. The same has been projected at $1.57 per pound for the second quarter.The company also sees operating cash flows of approximately $7.4 billion for 2024. Capital expenditures for the full year are projected to be around $4.6 billion.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

The consensus estimate has shifted 22.16% due to these changes.

VGM Scores

Currently, Freeport-McMoRan has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Freeport-McMoRan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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