Back on January 26 copper miner Freeport McMoRan (FCX) dropped sharply–down 6.5%–when the company lowered guidance for production in 2021. For 2021 Freeport McMoRan expects sales of 3.8 billion pounds of copper and 1.3 million ounces of gold. In October the company guided analysts to production of 3.85 billion pounds of copper and 1.4 million ounces of gold. (Freeport-McMoRan did raised its 2022 target for copper sales to 4.3 billion pounds from 4.2 billion.)
But the company did report fourth quarter earnings of 39 cents a share, matching Wall Street projections. In the fourth quarter of 2019, the company earned 2 cents a share.
But the company also projected the net cash cost for 2021 would climb to $1.25 per pound of copper, up projections of from $1.20 a pound for 2021 in October 2020. Rising costs are never good news for a commodity producer.
But (and I promise this is the last “but”) Freeport McMoRan said that it expected to resume dividend payments in 2021. The company carried through on that projection on February 2 when it announced a cash dividend on its common stock at an annual rate of $0.30 per share. The company’s previous cash dividend on its common stock was $0.20 per share prior to suspending these payments in April 2020. The company’s board said the first quarterly payment of $0.075 per share will be paid on May 1, 2020. In addition, the board adopted a new financial policy that allocates up to 50% of available cash flows after planned capital spending and distributions to noncontrolling interests to shareholders.
Today, February 3, shares of Freeport McMoRan closed up 3.77% to $29.20. The stock is a member of my Jubak Picks Portfolio where it is up 2.93% since I added it on January 6, 2021. As of today, February 3, I’m keeping my target price at $34 a share.