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What's in the Cards for Freeport (FCX) This Earnings Season?

Zacks Equity Research

Freeport-McMoRan Inc. FCX is set to release first-quarter 2019 results on Apr 25, before the opening bell.

The stock has lost 27.4% in the past year compared with the industry’s 24.6% decline.

Few of the Factors at Play

Rising unit net cash costs for copper is a concern for Freeport, which is likely to reflect on the upcoming quarterly results. In the last reported quarter, consolidated average unit net cash costs for copper surged nearly 50% year over year. Moreover, the same is expected to witness a roughly 62% year-over-year jump to $1.73 per pound in 2019, which reflects lower-than-expected sales volumes. As such, higher costs may continue to impact margins in the to-be-reported quarter.

What do the Estimates Say?

Freeport, during its fourth-quarter 2018 earnings call, stated that it expects copper sales for the first quarter to be 0.8 million pounds. Gold sales and molybdenum sales are estimated at 255,000 ounces and 24 million pounds, respectively.  

The Zacks Consensus Estimate for Freeport’s first-quarter consolidated revenues is currently pegged at $3,817 million, suggesting a year-over-year decline of around 21.6%. 

Zacks Model

Our proven model does not show that Freeport is likely to beat estimates to-be-reported quarter. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below:

Earnings ESP: Earnings ESP for Freeport is 0.00%. The Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 8 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, which when combined with a 0.00% ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 (Sell) or #5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Freeport-McMoRan Inc. Price and EPS Surprise


Freeport-McMoRan Inc. Price and EPS Surprise | Freeport-McMoRan Inc. Quote


Stocks Poised to Beat Estimates

Here are some companies in the same space you may want to consider as our model shows that they have the right combination of elements to beat estimates.

Kinross Gold Corporation KGC has an Earnings ESP of +9.09% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ingevity Corporation NGVT has an Earnings ESP of +6.77% and carries a Zacks Rank #3.

Ternium S.A. TX has an Earnings ESP of +6.21% and carries a Zacks Rank #3.

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