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

Zacks Equity Research
·4 min read

Freeport-McMoRan Inc. FCX is set to release third-quarter 2020 results on Oct 22, before the opening bell.

The company has a trailing four-quarter earnings surprise of 81.8%, on average. Freeport’s third-quarter results likely gained from higher copper prices amid demand-supply imbalance.

The stock has gained 74.6% in the past year compared with the industry’s 40.7% rise.

 

Let’s see how things are shaping up for the upcoming announcement.

Factors at Play in Q3

For the third quarter, Freeport expects sales volumes to be 790 million pounds of copper, 220,000 ounces of gold and 18 million pounds of molybdenum.

Copper prices have been rising lately, partly driven by a surge in demand in top consumer China, improving manufacturing and industrial activities, and supply chain disruptions. The demand-supply imbalance has driven copper prices in the to-be-reported quarter and is likely to have boosted Freeport’s margins in the quarter.

What do the Estimates Indicate?

The Zacks Consensus Estimate for Freeport’s third-quarter consolidated revenues is currently pegged at $3,758 million, which suggests a year-over-year rise of 13.6%.

The Zacks Consensus Estimate for third-quarter consolidated net cash costs per pound of copper is currently pegged at $1.4, which calls for 11.9% fall on a year-over-year basis. The same for average realized price for copper stands at $2.86 per pound, which calls for a 9.2% rise year over year.

The consensus mark for consolidated copper sales for the third quarter is pegged at 796 million pounds, which suggests a modest rise of 0.1%.

FreeportMcMoRan Inc. Price and EPS Surprise

FreeportMcMoRan Inc. Price and EPS Surprise
FreeportMcMoRan Inc. Price and EPS Surprise

FreeportMcMoRan Inc. price-eps-surprise | FreeportMcMoRan Inc. Quote

What Does the Zacks Model Say?

Our proven model doesn’t 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 23 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 Likely to Beat Estimates

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

Coeur Mining, Inc. CDE, scheduled to release third-quarter 2020 results on Oct 28, has an Earnings ESP of +60.00% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pan American Silver Corp. PAAS, scheduled to release third-quarter 2020 earnings on Nov 4, has an Earnings ESP of +2.78% and carries a Zacks Rank #3.

Westlake Chemical Corporation WLK, slated to release third-quarter 2020 earnings on Nov 3, has an Earnings ESP of +6.32% and carries a Zacks Rank #3.

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Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

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Westlake Chemical Corporation (WLK) : Free Stock Analysis Report
 
FreeportMcMoRan Inc. (FCX) : Free Stock Analysis Report
 
Coeur Mining, Inc. (CDE) : Free Stock Analysis Report
 
Pan American Silver Corp. (PAAS) : Free Stock Analysis Report
 
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Zacks Investment Research