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Why Freeport-McMoRan Copper & Gold (FCX) is Slipping

Stocks in this article: FCX

NEW YORK (TheStreet) -- Shares of Freeport-McMoRan Copper & Gold (FCX) dipped lower on Wednesday after the international miner posted disappointing fourth-quarter results. By early afternoon, the stock had given up 1.7% to $34.65.

Fourth-quarter net income of 68 cents a share fell well below consensus of 80 cents a share according to analysts surveyed by Yahoo! Finance. Revenue of $5.88 billion, though 30.4% higher than the year-ago quarter, missed expectations by $520 million. Sales and profitability suffered from the decreasing price of copper and gold over 2013.

The Phoenix-based industrial saw an increase in consolidated sales in each of its product classes over 2013. Consolidated sales of copper increased 12.3% to 4.1 billion pounds, gold jumped 20% to 1.2 million ounces, and molybdenum climbed 12% to 93 million pounds.

Over 2014, management expects copper production to increase 7.3% to 4.4 billion pounds, gold to jump 41% to 1.7 million ounces and molybdenum to climb 2.1% to 95 million pounds.

Also concerning investors, during its conference call Wednesday, CEO Richard Adkerson said the company would defend its rights against an export tax introduced in Indonesia it says violates its contract with the government. Until the issue is resolved, the miner will defer production of around 40 million pounds of copper and 80,000 ounces of gold a month.

TheStreet Ratings team rates FREEPORT-MCMORAN COP&GOLD as a Buy with a ratings score of B-. The team has this to say about their recommendation:

"We rate FREEPORT-MCMORAN COP&GOLD (FCX) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."

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