{"id":26884,"date":"2023-06-24T06:54:14","date_gmt":"2023-06-24T10:54:14","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/freeport-mcmoran-stock-tough-outlook-with-chinas-economy-weakening-nysefcx\/"},"modified":"2023-06-24T06:54:17","modified_gmt":"2023-06-24T10:54:17","slug":"freeport-mcmoran-stock-tough-outlook-with-chinas-economy-weakening-nysefcx","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=26884","title":{"rendered":"Freeport-McMoRan Stock: Tough Outlook With China’s Economy Weakening (NYSE:FCX)"},"content":{"rendered":"
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Introduction<\/h2>\n

The Phoenix-based Freeport-McMoRan (NYSE:FCX<\/span>), the world’s largest publicly-traded copper company, released its first quarter 2023 results on April 21, 2023.<\/p>\n

Note:<\/strong> This article updates my preceding article, published on February 28, 2023. I have been following Freeport-McMoRan since Sept. 2019.<\/p>\n

CEO Richard Adkerson said in the conference call:<\/p>\n

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As we move forward, copper miners will be required to expand production to meet demand. At Freeport, we’re in a strong position to develop new sources of copper supply to grow our business from our vast brownfield resources and also to grow our business from the rapidly developing leach technology and the supporting data analytics.<\/p>\n<\/blockquote>\n

1 – First Quarter 2023 Results Snapshot<\/h4>\n

Freeport-McMoRan posted a quarterly profit of $663 million<\/strong> or $0.46 per share,<\/strong> beating analysts’ expectations despite a lower-than-expected revenue. Adjusted earnings per share came in at $0.52 per share. Below are the results and production snapshot for 1Q23 from the <\/span>presentation.<\/p>\n

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\"Table\"<\/span>
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FCX 1Q23 Highlights (FCX Presentation)<\/p>\n<\/figcaption><\/figure>\n<\/p>\n

Revenues fell 18.4% year over year to $5,389 million in 1Q23<\/strong>. Lower Copper prices and lower production hurt Freeport-McMoRan results in 1Q23.<\/p>\n

Consolidated production totaled 965 billion pounds of copper<\/strong>, 405 thousand ounces of gold<\/strong>, and 21 million pounds of Molybdenum<\/strong> in the first quarter of 2023. Unit cash cost per Cu Lbs was $1.76 in 1Q23<\/strong> from $1.33 in 2022.<\/p>\n

Consolidated sales from mines were 832 million pounds of copper. The company sold 270K ounces of gold and 19 million pounds of Molybdenum in the third quarter.<\/p>\n

CEO Richard Adkerson said in the conference call:<\/p>\n

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Our team in Indonesia, once again, proved resilient in overcoming a major flood event. Now, we’re accustomed to dealing with rainfall at Grasberg. It’s located high in the mountains of New Guinea, one of the wettest places on the globe.<\/p>\n<\/blockquote>\n

2 – Stock Performance<\/h4>\n

Freeport-McMoRan has slightly outperformed the COPX ETF. FCX is now up 27% in one year.<\/p>\n

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\"Chart\"
Data by YCharts<\/figcaption><\/figure>\n<\/p>\n

3 – Investment Thesis<\/h4>\n

Investing in FCX long-term is a good idea if you believe copper has a bright future, as I do, even if 2023 may turn bearish for the metal. I think the company will perform well long term, and I have owned FCX for many years.<\/p>\n

Freeport-McMoRan offers a great business model from a long-term investment perspective relative to gold and<\/strong> copper mining. The company is one of the most prolific producers of copper and produces a significant amount of gold from its Grasberg mine in Central Papua, Indonesia.<\/p>\n

However, FCX is subject to China for business, with strong demand expected for copper. Unfortunately, the rebound that many analysts predicted confidently earlier this year is not happening as expected.<\/p>\n

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\"Chart\"<\/span>
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FCX 1-Year Chart Gold, Copper, Silver (Fun Trading StockCharts)<\/p>\n<\/figcaption><\/figure>\n<\/p>\n

Thus, the strategy that I recommend is to trade 50% LIFO of your total position. It will let you keep a core long-term position for higher ground and enjoy a secure dividend which hopefully will be higher in 2024. By trading LIFO, you always sell the most recent purchases, whereas your core long-term is untouched.<\/p>\n

Freeport-McMoRan – 1Q23 – Balance Sheet and Trend History – The Raw Numbers<\/h2>\n

<\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n<\/colgroup>\n\n\n\n\n\n\n\n\n\n\n\n\n
Freeport-McMoRan<\/strong><\/td>\n1Q22<\/strong><\/td>\n2Q22<\/strong><\/td>\n3Q22<\/strong><\/td>\n4Q22<\/strong><\/td>\n1Q23<\/strong><\/td>\n<\/tr>\n
Total Revenues in $ Million<\/td>\n6,603<\/td>\n5,416<\/td>\n5,003<\/td>\n5,758<\/td>\n5,389<\/td>\n<\/tr>\n
Net income in $ Million<\/td>\n1,527<\/td>\n840<\/td>\n404<\/td>\n697<\/td>\n663<\/td>\n<\/tr>\n
EBITDA $ Million<\/td>\n3,329<\/td>\n2,262<\/td>\n1,515<\/td>\n2,188<\/td>\n2,088<\/td>\n<\/tr>\n
EPS diluted in $\/share<\/td>\n1.04<\/td>\n0.57<\/td>\n0.28<\/td>\n0.48<\/td>\n0.46<\/td>\n<\/tr>\n
Cash from Operations<\/td>\n1,691<\/td>\n1,621<\/td>\n758<\/td>\n1,069<\/td>\n1,050<\/td>\n<\/tr>\n
Capital Expenditure In $ Million<\/td>\n723<\/td>\n863<\/td>\n836<\/td>\n1,047<\/td>\n1,121<\/td>\n<\/tr>\n
Free Cash Flow in $ Million<\/td>\n968<\/td>\n758<\/td>\n-78<\/td>\n22<\/td>\n-71<\/td>\n<\/tr>\n
Total Cash $ Million<\/td>\n8,338<\/td>\n9,492<\/td>\n8,578<\/td>\n8,146<\/td>\n6,852<\/td>\n<\/tr>\n
Total Long-term Debt in $ Million<\/td>\n9,621<\/td>\n11,092<\/td>\n10,690<\/td>\n10,620<\/td>\n9,635<\/td>\n<\/tr>\n
Quarterly Dividend $\/share<\/td>\n\n

0.15<\/p>\n<\/td>\n

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0.15<\/p>\n<\/td>\n

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0.15<\/p>\n<\/td>\n

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0.15<\/p>\n<\/td>\n

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0.15<\/p>\n<\/td>\n<\/tr>\n

Shares outstanding (diluted) in Billion<\/td>\n1,469<\/td>\n1,457<\/td>\n1,435<\/td>\n1,439<\/td>\n1,443<\/td>\n<\/tr>\n<\/table>\n

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