Freeport McMoRan Copper & Gold (FCX) made a forward-looking and much-lauded addition of oil and natural gas production to its asset mix, but the company is still very much a producer of copper and gold. For that reason, FCX stock is still considered a bellwether for the two metals …. and just-released Freeport McMoRan earnings certainly attest to that fact.

While Freeport McMoRan did report a profit — something other gold miners like Barrick Gold (ABX) haven’t been able to do lately — results at FCX weren’t exactly awesome.

But with Freeport McMoRan being pushed towards a more diversified mix of resources — i.e. energy — FCX stock could be a bargain in the making. That’s especially true when you factor in the fact that FCX stock offers a juicy dividend.

Freeport McMoran Earnings Decline

The tale for Freeport McMoRan earnings in the most recent quarter was one of lower costs for its two major products: copper and gold.

These metals — both of which are key for FCX stock — have been hit by a variety of factors that have driven their prices downward to lows not seen since the credit crisis and global recession.The Freeport McMoRan earning report showed average selling prices for copper at $3.31 per pound, while gold averaged just $1,220 an ounce. For comparison, during the fourth quarter of 2012, prices for the metals averaged $3.61 and $1,681, respectively.

Operating within those constraints, FCX reported lower profits than a year ago.

Overall, Freeport McMoRan earnings came to just $707 million, or 68 cents per share. That was down from $743 million, or 78 cents per share, during the fourth quarter of 2012. Aside from the generally lower costs for copper and gold, earnings were also zapped by negative oil and gas hedges and other one-time items. These one-time costs ended up hurting FCX by roughly 16 cent per share for the quarter.

Backing out these one-time issues, Freeport McMoRan earnings would have beaten the 80-cent average analyst estimate.

A major win for FCX, though, was higher revenues. Freeport McMoRan revenue improved by 30% to reach $5.89 billion as the company sold more copper, gold and energy during the previous three months. FCX stock investors had to like these numbers: Copper sales totaled 1.14 billion pounds, while gold sales hit 512,000 ounces — nearly doubling production last year. Likewise, FCX saw higher oil and molybdenum — which is used to strengthen steel — production during the quarter.

Another potential bright spot in the Freeport McMoRan earnings report was that the firm saw generally lower costs of production at its mines. Rising input costs — electricity, labor etc. — have been a huge drag on profitability at a variety of rival miners like AngloGold Ashanti (AU). Those cost effects have been detrimental to those gold miners who operate in Africa. FCX does operate mines in Democratic Republic of Congo, so any reduction in costs can been seen as a good sign.

But FCX Stock Is a Long-Term Buy

While Freeport McMoRan was impacted by lower prices for its two main products, investors may want to consider seriously looking at FCX stock as a potential value play. Once again, the key is that Freeport McMoRan is quickly evolving into a more diverse resource play.

This reported quarter was really the first quarter that its new oil and gas operation was fully included. Last year, FCX purchased Plains Exploration & Production and McMoRan Exploration for around about $9 billion. This quarter, higher realized oil and natural gas prices helped Freeport McMoRan realize the profits that it did. The diverse product will help insure that FCX is not subject to so much in the way of boom-n-bust when it comes to metals prices. Roughly 25% of Freeport McMoRan earnings come from oil and gas production now.

More importantly, Freeport McMoRan continues to diversify into those energy assets. FCX predicts that its 2014 CAPEX spending will hit about $7 billion. Roughly half of that will go towards expanding its oil and gas business.

For investors, FCX stock is quickly becoming more like a BHP Billiton (BHP). Yet it’s being treated as strictly a gold miner. That potentially leads to an interest long-term bargain as Freeport McMoRan’s transformation takes place. FCX stock is currently trading for a forward P/E of under 11, making shares a buy today.

The icing on the cake is that FCX stock investors are being paid an industry-leading 3.5% dividend while they wait for Freeport McMoRan to add more oil and gas production to its mix.

Overall, FCX stock could be one of the most compelling developing resource plays out there … and the latest Freeport McMoRan earnings show what is possible from its oil and gas segment.

As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.