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Freeport (FCX) to Report Q3 Earnings: What's in the Cards?

Zacks Equity Research

Freeport-McMoRan Inc. FCX is set to release third-quarter 2019 results on Oct 23, before the opening bell. The company’s bottom line in the quarter is likely to reflect the impact of lower copper prices.

The stock has lost 20.2% in the past year compared with the industry’s 10.9% decline.

Some Factors at Play in Q3

In July 2019, Freeport stated that it expects 830 million pounds of copper, 230,000 ounces of gold and 25 million pounds of molybdenum for third-quarter 2019.

The impact of lower copper prices is likely to show on Freeport’s third-quarter margins. The U.S.-China trade tussle, slowing global economic growth as well as slowdown in China and weaker manufacturing activities are weighing on the prices of the red metal.

Moreover, Freeport’s average realized price for copper declined 10.7% year over year in the second quarter. The trend has most likely continued in the third quarter.

What do the Estimates Indicate?

The Zacks Consensus Estimate for Freeport’s third-quarter consolidated revenues is currently pegged at $3,579 million, which suggests a year-over-year decline of around 27.1%.

The Zacks Consensus Estimate for total net cash costs per pound of copper for the third quarter is currently pegged at $1.59, which indicates a rise of nearly two-folds year over year.

The consensus mark for consolidated copper sales in the to-be-reported quarter is 827 million pounds, which calls for a fall of 17.8% year over year.

The consensus mark for average realized copper price per pound for the third quarter is pegged at $2.63, which indicates a 6.1% decline year over year.

What the Zacks Model Says?

Our proven model doesn’t conclusively predict an earnings beat for Freeport this time around. 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 Most Accurate Estimate and the Zacks Consensus Estimate are both currently pegged at a loss of 1 cent. 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.

Freeport-McMoRan Inc. Price and EPS Surprise


Freeport-McMoRan Inc. Price and EPS Surprise

Freeport-McMoRan Inc. price-eps-surprise | Freeport-McMoRan Inc. Quote


Stocks Poised to Beat Estimates

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

Franco-Nevada Corporation FNV has an Earnings ESP of +6.15% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Barrick Gold Corporation GOLD has an Earnings ESP of +1.89% and carries a Zacks Rank #3.

Iamgold Corporation IAG has an Earnings ESP of +50.00% and carries a Zacks Rank #3.

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