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Freeport (FCX) to Report Q3 Earnings: What's in the Offing?

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Freeport-McMoRan Inc. FCX is set to release third-quarter 2021 results before the opening bell on Oct 21.

The mining giant’s earnings beat the Zacks Consensus Estimate in two of the last four quarters, while missed once and were in-line on the other occasion. It has a trailing four-quarter earnings surprise of roughly 5.9%, on average. Freeport’s third-quarter results are likely to reflect the benefits of higher copper prices and cost-management actions.

The stock has rallied 118.9% in the past year compared with the industry’s 71.9% rise.

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Zacks Investment Research

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What do the Estimates Indicate?

For the third quarter, Freeport expects sales volumes to be 1.035 billion pounds of copper, 360,000 ounces of gold and 21 million pounds of molybdenum.

The Zacks Consensus Estimate for Freeport’s third-quarter consolidated revenues is currently pegged at $6,208 million, which suggests a year-over-year rise of 61.2%.

The Zacks Consensus Estimate for third-quarter consolidated net cash costs per pound of copper is currently pegged at $1.30, which calls for 1.5% fall on a year-over-year basis. The same for average realized price for copper stands at $4.22 per pound, reflecting a 40.2% rise year over year.

The consensus mark for consolidated copper sales for the third quarter is pegged at 1,018 million pounds, which suggests a year-over-year rise of 20%.

A Few Factors to Watch

Freeport is expected to have benefited from year-over-year higher copper prices in the third quarter. Copper has bounced back after taking a beating in the earlier part of 2020 as the coronavirus pandemic ravaged the global economy. The widely-used industrial metal has witnessed a rally after plunging to multi-year lows in March 2020. The rebound has been backed by expectations of an economic recovery, supply chain disruptions associated with the pandemic, a recovery in industrial activities and higher demand from top consumer China.

Higher year over year average realized prices are expected to have boosted Freeport’s margins in the September quarter. The company is also likely to have benefited from its continued focus on maintaining a low-cost position.

The ramp-up of underground mining at PT Freeport Indonesia and efforts to increase operating rates at Cerro Verde are also likely to have driven the company’s copper and gold sales volumes in the quarter to be reported.

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

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 -1.23%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at 80 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 they have the right combination of elements to post an earnings beat this quarter:

Olin Corporation (OLN), scheduled to release earnings on Oct 21, has an Earnings ESP of +7.45% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nutrien Ltd. NTR, scheduled to release earnings on Nov 1, has an Earnings ESP of +0.77% and carries a Zacks Rank #1.

United States Steel Corporation X, scheduled to release earnings on Oct 28, has an Earnings ESP of +2.86% and carries a Zacks Rank #2.


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FreeportMcMoRan Inc. (FCX) : Free Stock Analysis Report

United States Steel Corporation (X) : Free Stock Analysis Report

Olin Corporation (OLN) : Free Stock Analysis Report

Nutrien Ltd. (NTR) : Free Stock Analysis Report

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