We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Freeport (FCX) Poised for a Beat This Earnings Season?
Read MoreHide Full Article
Freeport-McMoRan Inc. (FCX - Free Report) is set to release fourth-quarter 2017 results ahead of the bell on Jan 25.
In the last quarter, the mining company delivered a positive earnings surprise of 17.2% by posting adjusted earnings of 34 cents per share, which surpassed the Zacks Consensus Estimate of 29 cents.
Revenues went up around 11.2% year over year to $4,310 million in the third quarter, also topping the Zacks Consensus Estimate of $4,104.1 million.
Freeport missed the Zacks Consensus Estimate in three of the trailing four quarters while beating once, with an average negative surprise of 7.9%.
Shares of Freeport have moved up 31% in the last three months, outperforming the industry’s 15.5% gain.
Can the company surprise investors again or is it heading for a possible pullback? Let’s see how things are shaping up for this announcement.
Earnings Whispers
Our proven model shows that Freeport is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is the case here as you will see below:
Zacks ESP: Earnings ESP for Freeport for the fourth quarter is +2.83%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 50 cents and 49 cents, respectively. 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 positive ESP, makes us reasonably confident of an earnings beat.
Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Factors at Play
Freeport, during third-quarter earnings call, stated that the company expects sales volumes for 2017 to be roughly 3.7 billion pounds of copper, 1.6 million ounces of gold and 94 million pounds of molybdenum, including 1 billion pounds of copper, 625,000 ounces of gold and 23 million pounds of molybdenum for fourth-quarter 2017.
The company assumes average prices of $3.00 per pound of copper and $1,300 per ounce of gold for fourth-quarter 2017. Average realized prices for copper and gold were $2.94 per pound and $1,290 per ounce, respectively, in the third quarter. The company gained from higher copper prices in the third quarter which is expected to continue in the December quarter.
Meanwhile, consolidated copper production for the fourth quarter is expected to rise 2.1% from the third quarter as the Zacks Consensus Estimate for the fourth quarter stands at 1,017 million pounds. The Zacks Consensus Estimate for consolidated revenues for the fourth quarter is $4.8 billion, reflecting a year over year increase of around 9.7%.
Copper sales from Freeport’s North American Copper Mines for the fourth quarter is projected to suffer a 4.5% decrease from the third as the Zacks Consensus Estimate for the fourth quarter is pegged at 358 million pounds. The segment’s sales volume decreased in the previous quarter mainly due to lower ore grades and timing of shipments.
Gold sales from the Indonesia Mining for the fourth quarter is projected to increase by 47.3% from the third quarter as the Zacks Consensus Estimate for the fourth quarter is pegged at 607,000 ounces. Copper sales from Indonesia Mining are expected to rise 16.7% from the third quarter as the Zacks Consensus Estimate for the fourth quarter is 342 million pounds.
The Zacks Consensus Estimate for copper sales from the company’s South America Mining is expected to be 315 million pounds for the fourth quarter, reflecting an estimated 4% decline on a sequential-comparison basis.
Freeport is taking actions to cut mining costs and manage capital expenditures. For 2017, Freeport’s copper cost guidance of $1.19 per pound reflects a decline in consolidated unit net cash costs from 2016 level of $1.26 per pound.
Consolidated average unit net cash costs for copper is also expected to decline 19.8% sequentially in the fourth quarter as the Zacks Consensus Estimate for the fourth quarter is pegged at 97 cents per pound. This should also lend support to fourth-quarter margins.
Here are some other companies in the basic materials space you may want to consider as our model shows they too have the right combination of elements to post an earnings beat this quarter:
LyondellBasell Industries N.V. (LYB - Free Report) has an Earnings ESP of +0.55% and carries a Zacks Rank #2.
Kinross Gold Corporation (KGC - Free Report) has an Earnings ESP of +2.27% and carries a Zacks Rank #3.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Is Freeport (FCX) Poised for a Beat This Earnings Season?
Freeport-McMoRan Inc. (FCX - Free Report) is set to release fourth-quarter 2017 results ahead of the bell on Jan 25.
In the last quarter, the mining company delivered a positive earnings surprise of 17.2% by posting adjusted earnings of 34 cents per share, which surpassed the Zacks Consensus Estimate of 29 cents.
Revenues went up around 11.2% year over year to $4,310 million in the third quarter, also topping the Zacks Consensus Estimate of $4,104.1 million.
Freeport missed the Zacks Consensus Estimate in three of the trailing four quarters while beating once, with an average negative surprise of 7.9%.
Shares of Freeport have moved up 31% in the last three months, outperforming the industry’s 15.5% gain.
Can the company surprise investors again or is it heading for a possible pullback? Let’s see how things are shaping up for this announcement.
Earnings Whispers
Our proven model shows that Freeport is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is the case here as you will see below:
Zacks ESP: Earnings ESP for Freeport for the fourth quarter is +2.83%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 50 cents and 49 cents, respectively. 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 positive ESP, makes us reasonably confident of an earnings beat.
Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Factors at Play
Freeport, during third-quarter earnings call, stated that the company expects sales volumes for 2017 to be roughly 3.7 billion pounds of copper, 1.6 million ounces of gold and 94 million pounds of molybdenum, including 1 billion pounds of copper, 625,000 ounces of gold and 23 million pounds of molybdenum for fourth-quarter 2017.
The company assumes average prices of $3.00 per pound of copper and $1,300 per ounce of gold for fourth-quarter 2017. Average realized prices for copper and gold were $2.94 per pound and $1,290 per ounce, respectively, in the third quarter. The company gained from higher copper prices in the third quarter which is expected to continue in the December quarter.
Meanwhile, consolidated copper production for the fourth quarter is expected to rise 2.1% from the third quarter as the Zacks Consensus Estimate for the fourth quarter stands at 1,017 million pounds. The Zacks Consensus Estimate for consolidated revenues for the fourth quarter is $4.8 billion, reflecting a year over year increase of around 9.7%.
Copper sales from Freeport’s North American Copper Mines for the fourth quarter is projected to suffer a 4.5% decrease from the third as the Zacks Consensus Estimate for the fourth quarter is pegged at 358 million pounds. The segment’s sales volume decreased in the previous quarter mainly due to lower ore grades and timing of shipments.
Gold sales from the Indonesia Mining for the fourth quarter is projected to increase by 47.3% from the third quarter as the Zacks Consensus Estimate for the fourth quarter is pegged at 607,000 ounces. Copper sales from Indonesia Mining are expected to rise 16.7% from the third quarter as the Zacks Consensus Estimate for the fourth quarter is 342 million pounds.
The Zacks Consensus Estimate for copper sales from the company’s South America Mining is expected to be 315 million pounds for the fourth quarter, reflecting an estimated 4% decline on a sequential-comparison basis.
Freeport is taking actions to cut mining costs and manage capital expenditures. For 2017, Freeport’s copper cost guidance of $1.19 per pound reflects a decline in consolidated unit net cash costs from 2016 level of $1.26 per pound.
Consolidated average unit net cash costs for copper is also expected to decline 19.8% sequentially in the fourth quarter as the Zacks Consensus Estimate for the fourth quarter is pegged at 97 cents per pound. This should also lend support to fourth-quarter margins.
Freeport-McMoran, Inc. Price and EPS Surprise
Freeport-McMoran, Inc. Price and EPS Surprise | Freeport-McMoran, Inc. Quote
Other Stocks Poised to Beat Estimates
Here are some other companies in the basic materials space you may want to consider as our model shows they too have the right combination of elements to post an earnings beat this quarter:
Agnico Eagle Mines Limited (AEM - Free Report) has an Earnings ESP of +20.99% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
LyondellBasell Industries N.V. (LYB - Free Report) has an Earnings ESP of +0.55% and carries a Zacks Rank #2.
Kinross Gold Corporation (KGC - Free Report) has an Earnings ESP of +2.27% and carries a Zacks Rank #3.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>