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The mining giant’s earnings missed the Zacks Consensus Estimate in three of the last four quarters, while beat once. It has a trailing four-quarter negative earnings surprise of roughly 6.7%, on average.
Freeport’s fourth-quarter results are likely to have been impacted by higher year over year unit net cash costs and lower copper prices. However, the company is likely to have gained from higher mining rates.
The stock has gained 13.7% in the past year compared with the industry’s 32.1% rise.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
Zacks Model
Our proven model predicts 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 earning beat.
Earnings ESP: Earnings ESP for Freeport is +6.96%. The Zacks Consensus Estimate for the fourth quarter is currently pegged at 40 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 #2.
What do the Estimates Indicate?
For the fourth quarter of 2022, Freeport expects sales volumes to be 1 billion pounds of copper, 420,000 ounces of gold and 20 million pounds of molybdenum.
The Zacks Consensus Estimate for Freeport’s fourth-quarter consolidated revenues is currently pegged at $5,365.4 million, which suggests a year-over-year decline of 13%.
The Zacks Consensus Estimate for fourth-quarter consolidated net cash costs per pound of copper is currently pegged at $1.65, which calls for roughly 27.9% increase on a year-over-year basis and a 5.7% sequential decline.
The consensus mark for consolidated copper sales for the fourth quarter is pegged at 1,020 million pounds, flat year over year and down around 3.8% sequentially. The same for average realized price for copper is pinned at $3.57 per pound, indicating a 19.2% year-over-year decline and a 2% sequential rise.
A Few Factors to Watch
Freeport’s fourth-quarter results are expected to reflect the impacts of weaker year over year copper prices. Copper prices lost the momentum since the second quarter of 2022. 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 2022 after hitting an all-time high in March driven by concerns over supply-chain disruptions, exacerbated by Russia's invasion of Ukraine, a spike in energy costs and low global inventories.
Nevertheless, copper prices have rebounded since October on the back of tight supply and expectations of a demand recovery partly driven by China government's announcement of new measures to ease pandemic restrictions in late 2022.
Notwithstanding the recovery in copper prices in the December quarter, the impacts of lower year over year average realized copper prices are likely to reflect on Freeport’s fourth-quarter revenues and margins. The company is also likely to have witnessed higher year over year unit net cash costs in the quarter partly due to higher energy prices.
However, strong performance 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.
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 Agnico Eagle’s fourth-quarter earnings has been stable in the past 60 days. The Zacks Consensus Estimate for AEM’s earnings for the quarter is pegged at 40 cents.
Nucor Corporation (NUE - Free Report) , slated to release earnings on Jan 26, has an Earnings ESP of +3.29%.
The consensus estimate for Nucor’s earnings for the fourth quarter is currently pegged at $4.18. NUE currently carries a Zacks Rank #1.
Steel Dynamics, Inc. (STLD - Free Report) , scheduled to release earnings on Jan 25, has an Earnings ESP of +14.55%.
The Zacks Consensus Estimate for Steel Dynamics’ fourth-quarter earnings is currently pegged at $3.60. STLD currently carries a Zacks Rank #1.
Image: Bigstock
Freeport (FCX) to Report Q4 Earnings: What's in the Offing?
Freeport-McMoRan Inc. (FCX - Free Report) is set to release fourth-quarter 2022 results before the opening bell on Jan 25.
The mining giant’s earnings missed the Zacks Consensus Estimate in three of the last four quarters, while beat once. It has a trailing four-quarter negative earnings surprise of roughly 6.7%, on average.
Freeport’s fourth-quarter results are likely to have been impacted by higher year over year unit net cash costs and lower copper prices. However, the company is likely to have gained from higher mining rates.
The stock has gained 13.7% in the past year compared with the industry’s 32.1% rise.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
Zacks Model
Our proven model predicts 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 earning beat.
Earnings ESP: Earnings ESP for Freeport is +6.96%. The Zacks Consensus Estimate for the fourth quarter is currently pegged at 40 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 #2.
What do the Estimates Indicate?
For the fourth quarter of 2022, Freeport expects sales volumes to be 1 billion pounds of copper, 420,000 ounces of gold and 20 million pounds of molybdenum.
The Zacks Consensus Estimate for Freeport’s fourth-quarter consolidated revenues is currently pegged at $5,365.4 million, which suggests a year-over-year decline of 13%.
The Zacks Consensus Estimate for fourth-quarter consolidated net cash costs per pound of copper is currently pegged at $1.65, which calls for roughly 27.9% increase on a year-over-year basis and a 5.7% sequential decline.
The consensus mark for consolidated copper sales for the fourth quarter is pegged at 1,020 million pounds, flat year over year and down around 3.8% sequentially. The same for average realized price for copper is pinned at $3.57 per pound, indicating a 19.2% year-over-year decline and a 2% sequential rise.
A Few Factors to Watch
Freeport’s fourth-quarter results are expected to reflect the impacts of weaker year over year copper prices. Copper prices lost the momentum since the second quarter of 2022. 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 2022 after hitting an all-time high in March driven by concerns over supply-chain disruptions, exacerbated by Russia's invasion of Ukraine, a spike in energy costs and low global inventories.
Nevertheless, copper prices have rebounded since October on the back of tight supply and expectations of a demand recovery partly driven by China government's announcement of new measures to ease pandemic restrictions in late 2022.
Notwithstanding the recovery in copper prices in the December quarter, the impacts of lower year over year average realized copper prices are likely to reflect on Freeport’s fourth-quarter revenues and margins. The company is also likely to have witnessed higher year over year unit net cash costs in the quarter partly due to higher energy prices.
However, strong performance 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
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:
Agnico Eagle Mines Limited (AEM - Free Report) , scheduled to release earnings on Feb 16, has an Earnings ESP of +0.84% and sports a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Agnico Eagle’s fourth-quarter earnings has been stable in the past 60 days. The Zacks Consensus Estimate for AEM’s earnings for the quarter is pegged at 40 cents.
Nucor Corporation (NUE - Free Report) , slated to release earnings on Jan 26, has an Earnings ESP of +3.29%.
The consensus estimate for Nucor’s earnings for the fourth quarter is currently pegged at $4.18. NUE currently carries a Zacks Rank #1.
Steel Dynamics, Inc. (STLD - Free Report) , scheduled to release earnings on Jan 25, has an Earnings ESP of +14.55%.
The Zacks Consensus Estimate for Steel Dynamics’ fourth-quarter earnings is currently pegged at $3.60. STLD currently carries a Zacks Rank #1.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.