Why is Freeport-McMoRan (FCX) up 6.2% since its last earnings report?

A month has passed since Freeport-McMoRan’s (FCX) last earnings report. Shares have risen about 6.2% in that time, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Freeport-McMoRan headed for a decline? 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 key drivers.

Freeport’s earnings and revenues beat first-quarter estimates

Freeport reported net income (attributable to common stock) of $473 million, or 32 cents per share, in the first quarter of 2024, down approximately 29% from $663 million, or 46 cents, in the prior-year quarter.

Excluding one-time items, adjusted earnings per share came in at 32 cents, ahead of the Zacks Consensus Estimate of 27 cents.

Revenue increased approximately 17% year-over-year to approximately $6.32 billion. The figure also surpassed the Zacks Consensus Estimate of around $5.66 billion. The company recorded higher copper sales in the reported quarter. It also benefited from higher gold prices and lower costs.

Operational highlights

Copper production increased approximately 12% year-over-year to 1,085 million pounds in the quarter. This figure was higher than our estimate of £1,025 million.

Consolidated sales increased approximately 33% year-over-year to 1,108 million pounds of copper. This figure was higher than our estimate of £1,001 million. The positive side can be attributed to higher mining and milling rates and ore grades in PT-FI.

The company sold 568,000 ounces of gold, up approximately 110% year-over-year. Freeport also sold 20 million pounds of molybdenum during the quarter, up approximately 5% year-over-year.

Consolidated average unit net cash cost per pound of copper was $1.51, compared to $1.76 a year ago. This amount was lower than our estimate of $1.55.

The average realized copper price was $3.94 per pound, down approximately 4% year-over-year. This number was higher than our estimate of $3.81 per pound. The average realized price per ounce of gold increased by approximately 10% year over year to $2,145. This amount was higher than our estimate of $2,019.

The story continues

Financial position

Cash and cash equivalents at quarter-end were approximately $5.21 billion, down approximately 24% year-over-year. The company’s total debt was approximately $9.43 billion, down approximately 2% year-over-year.

Cash flow from operations was $1.9 billion in the reported quarter, up approximately 81% year-over-year.

Conductivity

Freeport expects consolidated 2024 sales 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 net unit cash cost of copper in 2024 is expected to average $1.57 per pound. The same level is forecast at $1.57 per pound in the second quarter.

The company also reports operating cash flow of approximately $7.4 billion in 2024. Capital expenditures for the full year are expected to be approximately $4.6 billion.

How have estimates changed since then?

It turns out that new estimates have been trending upwards over the past month.

As a result of these changes, the consensus estimate moved by 22.16%.

VGM results

Freeport-McMoRan currently has a Weak Growth Score of D, but its Momentum Score is performing much better at A. However, the stock is rated C for Value, ranking in the middle 20% in that range. investment strategy.

Overall, the stock has a Total VGM Score of C. If you’re not focused on one strategy, this score should interest you.

Perspectives

Estimates for the stock are trending upwards, and the scale of these revisions looks promising. Notably, Freeport-McMoRan carries a Zacks Rank #3 (Hold). We expect a linear rate of return on the stock over the next few months.

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