Freeport-McMoRan Inc. (NYSE:FCX) delivered impressive fourth-quarter and full-year earnings helped by higher copper and gold prices at the back of lower operating costs. The stellar earnings report might as well be the catalyst to help steer the stock higher, after a blockbuster 2020.
Higher Commodity Prices
The mining giant share price has more than quadrupled over the past year in line with the bullish sentiments in the mining industry. Gold prices rallying to record highs have been catalysts behind renewed investor interest in the stock.
Copper prices have also been on a fine run helped by growing industrial demand on the opening of the global economy, in the aftermath of COVID-19. According to Chief Executive officer, Richard Adkerson, the establishment of strong operating performance and project execution, positions Freeport for future growth on sales volumes and cash flows.
Likewise, the executive expects the copper and gold mining company to benefit a great deal from its long-lived and high-quality copper assets. Focus also shifts towards aggressive cost and capital management strategies in a bid to strengthen the bottom line.
Earnings Beat
Net income attributable to shareholders came in at $798 million or 48 cents a share, up from $9 million or break even on a per-share basis, a year ago. Revenues was also up, 14.9% to $4.50 billion above, consensus estimates of $4.37 billion as Freeport benefited from higher commodity prices. During the quarter, Freeport benefited from averaged realized price per pound for copper up 24% to $3.40. Realized price per ounce for gold was up 25.4% to $1870.
The stock was little changed despite the earnings topping estimates as investors reacted to the trimming of 2021 production guidance. The company expects the sale of 3.8 billion pounds of copper in 2021 and 1.3 million ounces of gold. That’s somewhat lower compared to a guidance of 3.85 billion pounds of copper and 1.4 billion ounces of gold announced in October.
Freeport has also confirmed plans to resume its dividend payment program in 2021 as part of its commitment to returning value to shareholders.