Freeport’s (FCX) Q4 Earnings Lag Estimates, Revenues Beat

Freeport-McMoRan Inc.


FCX

recorded net income (attributable to common stock) of $708 million or 48 cents per share in fourth-quarter 2020 against a profit of $9 million or break even per share in the year-ago quarter.

Barring one-time items, adjusted earnings per share came in at 38 cents that trailed the Zacks Consensus Estimate of 39 cents.

Revenues rose roughly 15% year over year to $4,495 million. The figure beat the Zacks Consensus Estimate of $4,278.8 million.

The mining giant benefited from higher copper and gold prices and lower costs in the quarter.

Operational Update

Copper production rose 4% year over year to 864 million pounds in the fourth quarter.

Consolidated sales from mines fell 4% year over year to 866 million pounds of copper. The company produced 273,000 ounces of gold and 19 million pounds of molybdenum during the quarter.

Consolidated average unit net cash costs per pound of copper were $1.28, down roughly 23% year over year due to reduced mining costs and higher by-product credits.

Average realized price for copper was $3.40 per pound, up roughly 24% year over year. Average realized price per ounce for gold increased roughly 25% year over year to $1,870. Average realized price per pound for molybdenum was $9.96, down around 15% year over year.

FY20 Results

Earnings (as reported) for full-year 2020 were 41 cents per share against a loss of 17 cents per share a year ago. Net sales dropped around 1% year over year to roughly $14.2 billion.

Financial Position

Cash and cash equivalents at the end of 2020 were $3,657 million, up 81% year over year. The company’s total debt was $9,711 million, down around 1% year over year.

Cash flows provided by operations more than doubled year over year to $3 billion for the full year.

Guidance

For 2021, Freeport anticipates consolidated sales volumes to be roughly 3.8 billion pounds of copper.

The company expects gold sales volumes of 1.3 million ounces for 2021. It also expects sales of 85 million pounds of molybdenum for the year.

For the first quarter of 2021, Freeport expects sales volumes to be 825 million pounds of copper, 275,000 ounces of gold and 20 million pounds of molybdenum.

Price Performance

Freeport’s shares have rallied 165.9% in the past year compared with the

industry

’s 106.7% rise.

Zacks Rank & Key Picks

Freeport currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include

Fortescue Metals Group Limited


FSUGY

,

Impala Platinum Holdings Limited


IMPUY

and

BHP Group


BHP

.

Fortescue has a projected earnings growth rate of 75.5% for the current fiscal. The company’s shares have surged around 139% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see


the complete list of today’s Zacks #1 Rank stocks here


.

Impala Platinum has an expected earnings growth rate of 189.4% for the current fiscal. The company’s shares have rallied around 57% in the past year. It currently carries a Zacks Rank #1.

BHP Group has a projected earnings growth rate of 59.5% for the current fiscal year. The company’s shares have gained around 35% in a year. It currently carries a Zacks Rank #1.

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