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The mining giant’s earnings beat the Zacks Consensus Estimate in two of the last four quarters, while missed twice. It has a trailing four-quarter earnings surprise of roughly 2.8%, on average.
Freeport’s third-quarter results are likely to have been impacted by higher unit net cash costs and lower copper and gold prices. However, the company is likely to have gained from higher mining rates.
The stock has lost 25.2% in the past year compared with the industry’s 29% decline.
Image Source: Zacks Investment Research
What do the Estimates Indicate?
For the third quarter, Freeport expects sales volumes to be 1 billion pounds of copper, 400,000 ounces of gold and 21 million pounds of molybdenum.
The Zacks Consensus Estimate for Freeport’s third-quarter consolidated revenues is currently pegged at $5,268.1 million, which suggests a year-over-year decline of 13.4%. Our estimate for the quarter is $5,406.4 million.
The Zacks Consensus Estimate for third-quarter consolidated net cash costs per pound of copper is currently pegged at $1.65, which calls for roughly 33.1% increase on a year-over-year basis and a rise of 17% on a sequential comparison basis. Our estimate for the quarter is $1.67.
The consensus mark for consolidated copper sales for the third quarter is pegged at 1,027 million pounds, which suggests a year-over-year decline of 0.6%. Our estimate for the quarter is 1,020 million pounds.
A Few Factors to Watch
Freeport’s third-quarter results are expected to reflect the impacts of weaker copper prices. Copper had a stellar run in 2021, thanks to a strong rebound in industrial demand from the pandemic-led downturn and supply constraints. The widely-used industrial metal witnessed a roughly 25% surge in 2021. The momentum continued in the first quarter of 2022.
However, copper prices have lost the momentum since the second quarter. The uncertainties surrounding the global economy and new coronavirus restrictions in China dwindled demand for the red metal, hurting prices. Copper prices headed south from late April after hitting an all-time high in March 2022 driven by concerns over supply-chain disruptions, made worse by Russia's invasion of Ukraine, a spike in energy costs and low global inventories.
The impacts of lower average realized copper prices are likely to reflect on Freeport’s September quarter results. The company is also likely to have witnessed sequentially higher unit net cash costs in the quarter partly due to higher energy prices.
Weaker gold prices are also likely to have affected the company’s performance in the third quarter. Higher yields, interest rate hikes and a stronger U.S. dollar weighed on gold prices.
Meanwhile, the ramp-up of underground mining at PT Freeport Indonesia and efforts to increase operating rates at Cerro Verde and El Abra mines are likely to have aided the company’s copper volumes in the quarter to be reported. The company is expected to have benefited from higher mining rates in South America.
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 -21.78%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at 36 cents. Our estimate for the quarter is 44 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 these have the right combination of elements to post an earnings beat this quarter:
The consensus estimate for Albemarle’s third-quarter earnings has been revised 9% upward in the past 60 days. The Zacks Consensus Estimate for ALB’s earnings for the quarter is pegged at $6.81.
Koppers Holdings Inc. (KOP - Free Report) , expected to release earnings on Nov 3, has an Earnings ESP of +2.28% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for Koppers’ third-quarter earnings has been revised 2.6% upward in the past 60 days. The consensus estimate for KOP’s earnings for the quarter is currently pegged at $1.17.
FMC Corporation (FMC - Free Report) , scheduled to release earnings on Nov 1, has an Earnings ESP of +0.30%.
The Zacks Consensus Estimate for FMC's earnings for the third quarter is currently pegged at $1.11. FMC currently carries a Zacks Rank #3.
Image: Bigstock
Freeport (FCX) to Report Q3 Earnings: What's in the Cards?
Freeport-McMoRan Inc. (FCX - Free Report) is set to release third-quarter 2022 results before the opening bell on Oct 20.
The mining giant’s earnings beat the Zacks Consensus Estimate in two of the last four quarters, while missed twice. It has a trailing four-quarter earnings surprise of roughly 2.8%, on average.
Freeport’s third-quarter results are likely to have been impacted by higher unit net cash costs and lower copper and gold prices. However, the company is likely to have gained from higher mining rates.
The stock has lost 25.2% in the past year compared with the industry’s 29% decline.
Image Source: Zacks Investment Research
What do the Estimates Indicate?
For the third quarter, Freeport expects sales volumes to be 1 billion pounds of copper, 400,000 ounces of gold and 21 million pounds of molybdenum.
The Zacks Consensus Estimate for Freeport’s third-quarter consolidated revenues is currently pegged at $5,268.1 million, which suggests a year-over-year decline of 13.4%. Our estimate for the quarter is $5,406.4 million.
The Zacks Consensus Estimate for third-quarter consolidated net cash costs per pound of copper is currently pegged at $1.65, which calls for roughly 33.1% increase on a year-over-year basis and a rise of 17% on a sequential comparison basis. Our estimate for the quarter is $1.67.
The consensus mark for consolidated copper sales for the third quarter is pegged at 1,027 million pounds, which suggests a year-over-year decline of 0.6%. Our estimate for the quarter is 1,020 million pounds.
A Few Factors to Watch
Freeport’s third-quarter results are expected to reflect the impacts of weaker copper prices. Copper had a stellar run in 2021, thanks to a strong rebound in industrial demand from the pandemic-led downturn and supply constraints. The widely-used industrial metal witnessed a roughly 25% surge in 2021. The momentum continued in the first quarter of 2022.
However, copper prices have lost the momentum since the second quarter. The uncertainties surrounding the global economy and new coronavirus restrictions in China dwindled demand for the red metal, hurting prices. Copper prices headed south from late April after hitting an all-time high in March 2022 driven by concerns over supply-chain disruptions, made worse by Russia's invasion of Ukraine, a spike in energy costs and low global inventories.
The impacts of lower average realized copper prices are likely to reflect on Freeport’s September quarter results. The company is also likely to have witnessed sequentially higher unit net cash costs in the quarter partly due to higher energy prices.
Weaker gold prices are also likely to have affected the company’s performance in the third quarter. Higher yields, interest rate hikes and a stronger U.S. dollar weighed on gold prices.
Meanwhile, the ramp-up of underground mining at PT Freeport Indonesia and efforts to increase operating rates at Cerro Verde and El Abra mines are likely to have aided the company’s copper volumes in the quarter to be reported. The company is expected to have benefited from higher mining rates in South America.
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 -21.78%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at 36 cents. Our estimate for the quarter is 44 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 these have the right combination of elements to post an earnings beat this quarter:
Albemarle Corporation (ALB - Free Report) , scheduled to release earnings on Nov 2, has an Earnings ESP of +8.13% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Albemarle’s third-quarter earnings has been revised 9% upward in the past 60 days. The Zacks Consensus Estimate for ALB’s earnings for the quarter is pegged at $6.81.
Koppers Holdings Inc. (KOP - Free Report) , expected to release earnings on Nov 3, has an Earnings ESP of +2.28% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for Koppers’ third-quarter earnings has been revised 2.6% upward in the past 60 days. The consensus estimate for KOP’s earnings for the quarter is currently pegged at $1.17.
FMC Corporation (FMC - Free Report) , scheduled to release earnings on Nov 1, has an Earnings ESP of +0.30%.
The Zacks Consensus Estimate for FMC's earnings for the third quarter is currently pegged at $1.11. FMC currently carries a Zacks Rank #3.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.