Why Mining Company Freeport-McMoRan's Shares Are Hitting Jackpot Today

Freeport-McMoRan Inc FCX reported fourth-quarter fiscal 2023 revenue growth of 2.6% year-over-year to $5.91 billion, beating the consensus of $5.86 billion.

Adjusted EPS was $0.27, beating the consensus of $0.22.

Fourth quarter copper sales totaled 1.1 billion pounds, an increase of 7.1% Y/Y, Average realized price per pound was $3.81 (+1.1% Y/Y), and Production totaled 1.095 billion pounds.

Gold sales of 549 thousand ounces were up 19.9% Y/Y; Average realized price per ounce was $2,034 (+13.7% Y/Y). Freeport-McMoRan has achieved 90% completion milestone on Indonesia smelter projects.

Operating income increased by 12.6% Y/Y to $1.72 billion, and margin expanded by 260 bps to 29.2%. Operating cash flow for the quarter totaled $1.32 billion, compared to $1.07 billion a year ago.

Freeport-McMoRan had $4.76 billion in consolidated cash and cash equivalents at the end of the quarter. Consolidated debt totaled $9.4 billion.

1Q24 Outlook: For the first quarter of 2024, Freeport-McMoRan expects consolidated sales volumes to be 1.0 billion pounds of copper, 575 thousand ounces of gold, and 20 million pounds of molybdenum. It expects unit net cash costs for copper mines to average $1.55 per pound of copper

2024 Outlook: Freeport-McMoRan expects consolidated sales volumes to be ~4.1 billion pounds of copper, 2.0 million ounces of gold, and 85 million pounds of molybdenum. It sees consolidated unit net cash costs for copper mines to average $1.60 per pound of copper in 2024.

The company expects operating cash flows of ~$5.8 billion in 2024, assuming average prices of $3.75 per pound for copper, $2,000 per ounce for gold, and $19.00 per pound for molybdenum for 2024. The company sees capital expenditures of ~$4.6 billion in 2024.

Price Action: FCX shares are trading higher by 5.2% at $40.16 on the last check Wednesday.

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