Freeport-McMoRan Reverses Lower On Mixed Results, Guidance

Freeport-McMoRan, a top copper producer, posted mixed fourth-quarter results, beating some bottom-line estimates while revenue trailed. Freeport also slightly lowered guidance for 2022 copper sales. FCX stock fell in Wednesday stock market action.

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Meanwhile, copper for March delivery erased solid morning gains to close slightly lower.

FCX Earnings

Estimates: Analysts expected Freeport-McMoRan to earn 97 cents a share, up 149% from a year ago, according to Zacks Investment Research. Revenue was seen rising 38.5% to $6.23 billion,

Results: Adjusted EPS rose 146% to 96 cents, missing the Zacks consensus, but beating others. Revenue grew 37% to $6.16 billion.

Outlook: The Phoenix, Ariz.-based miner trimmed guidance for 2022 copper sales to 4.3 billion pounds from 4.4 billion pounds, but raised 2023 guidance to 4.5 billion, from 4.4 billion. However, FCX introduced 2024 guidance for copper sales of 4.2 billion pounds.

On the cost front, Freeport said that average unit net cash costs should average $1.35 per pound of copper in 2022, vs. $1.34 in 2021.

FCX Stock

FCX stock rose as much as 3% but closed down 3% at 38.43. The copper play tumbled as low as 37.47 on Monday. Shares had touched a nearly 10-year high of 46.20 on Jan. 18, following a breakout from a cup-with-handle base with a 41.70 buy point.

Shares fell more than 8% below that entry over the past several sessions, triggering the automatic sell rule for investors who may have bought during the breakout. That highlights the risk of making purchases, even of high-quality stocks breaking out of valid patterns, while the market status reads “in correction.”

FCX stock dived to test support at its 200-day line on Monday and again on Tuesday. The stock rebounded from the 200-day level during both sessions and, on Wednesday, was attempting to retake support at its 50-day moving average.

While the buy point is no longer operative, FCX’s chart still looks relatively constructive — particularly if FCX stock can retake its 50-day line and, even better, its 21-day line.

However, make sure to read IBD’s daily afternoon The Big Picture column to get the latest on the prevailing stock market trend and what it means for your trading decisions.

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