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Freeport (FCX) to Report Q1 Earnings: What's in the Cards?

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Zacks Equity Research
·4 min read
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Freeport-McMoRan Inc. FCX is set to release first-quarter 2021 results on before the opening bell on Apr 22.

The mining giant’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, while missed once. It has a trailing four-quarter earnings surprise of roughly 61.4%, on average. The company posted a negative earnings surprise of around 2.6% in the last reported quarter. Freeport’s first-quarter results are likely to reflect the benefits of higher copper prices and lower costs.

The stock has rallied 403.8% in the past year compared with the industry’s 232.8% rise.


Let’s see how things are shaping up for the upcoming announcement.

What do the Estimates Indicate?

For the first quarter, Freeport expects sales volumes to be 825 million pounds of copper, 275,000 ounces of gold and 20 million pounds of molybdenum.

The Zacks Consensus Estimate for Freeport’s first-quarter consolidated revenues is currently pegged at $4,865 million, which suggests a year-over-year rise of 73.8%.

The Zacks Consensus Estimate for first-quarter consolidated net cash costs per pound of copper is currently pegged at $1.35, which calls for 28.9% fall on a year-over-year basis. The same for average realized price for copper stands at $3.74 per pound, reflecting a 53.9% rise year over year.

Moreover, the consensus mark for consolidated copper sales for the first quarter is pegged at 837 million pounds, which suggests a year-over-year rise of 14.8%.

A Few Factors to Watch

Freeport is likely to have gained from a rally in copper prices in the to-be-reported quarter. Copper has bounced back strongly after taking a beating in the earlier part of 2020 as the coronavirus pandemic ravaged the global economy. The widely-used industrial metal has witnessed a strong rally after plunging to multi-year lows in March 2020. The rebound has been backed by supply chain disruptions associated with the pandemic, a recovery in industrial activities and a surge in demand from top consumer China.

Notably, copper had a good run so far this year on surging demand driven by a pick-up in manufacturing activities, especially in China. The red metal has been gaining on solid manufacturing data from China as the economy continues to recover from the pandemic. Copper prices have been trending above $4.00 per pound since February 2021 riding on optimism regarding a robust U.S. economic growth, strong demand from China and mounting fears over a supply crunch. Supplies from two major producers, Chile and Peru, have been volatile due to the impact of the pandemic.

The demand-supply imbalance pushed copper prices north in the March quarter and is expected to have boosted Freeport’s margins in the quarter.

FreeportMcMoRan Inc. Price and EPS Surprise

FreeportMcMoRan Inc. Price and EPS Surprise
FreeportMcMoRan Inc. Price and EPS Surprise

FreeportMcMoRan Inc. price-eps-surprise | FreeportMcMoRan Inc. Quote

Zacks Model

Our proven model does not conclusively predict an earnings beat for Freeport this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Freeport is 0.00%. The Zacks Consensus Estimate for earnings for the first quarter is currently pegged at 51 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Freeport currently carries a Zacks Rank #3.

Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Dow Inc. DOW, scheduled to release earnings on Apr 22, has an Earnings ESP of +1.73% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Mosaic Company MOS, scheduled to release earnings on May 3, has an Earnings ESP of +3.06% and carries a Zacks Rank #1.

United States Steel Corporation X, scheduled to release earnings on Apr 29, has an Earnings ESP of +20.00% and carries a Zacks Rank #3.

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