Yahoo Finance Freeport (FCX) to Report Q1 Earnings: What's in the Cards?
Freeport-McMoRan Inc. FCX is set to release first-quarter 2023 results before the opening bell on Apr 21.
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 negative earnings surprise of roughly 1.1%, on average.
Freeport’s first-quarter results are likely to have been impacted by lower year over year copper prices and higher unit net cash costs. However, the company is expected to have gained from efforts to increase mining rates.
The stock has lost 13.9% in the past year compared with the industry’s 11.6% rise.
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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 +4.19%. The Zacks Consensus Estimate for the first quarter is currently pegged at 45 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.
What do the Estimates Indicate?
For the first quarter of 2023, Freeport expects sales volumes to be 0.9 billion pounds of copper, 300,000 ounces of gold and 20 million pounds of molybdenum.
The Zacks Consensus Estimate for Freeport’s first-quarter consolidated revenues is currently pegged at $5,386 million, which suggests a year-over-year decline of 18.4%.
The Zacks Consensus Estimate for first-quarter consolidated net cash costs per pound of copper is currently pegged at $1.73, which calls for roughly 30% increase on a year-over-year basis and a 13.1% sequential rise.
The consensus mark for consolidated copper sales for the first quarter is pegged at 951 million pounds, indicating a decline of 7.1% year over year and an around 8.7% decrease sequentially. The same for average realized price for copper is pinned at $3.93 per pound, reflecting a 15.7% year-over-year decline and a 4.2% sequential rise.
A Few Factors to Watch
Freeport’s first-quarter results are expected to reflect the impacts of weaker year over year copper 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. The price decline was due to uncertainties surrounding the global economy and new coronavirus restrictions in China that dwindled demand for the red metal.
Nevertheless, copper prices have rebounded since October 2022 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. A weaker dollar, concerns over supply and expectations of more stimulus from China are also driving factors for the uptick in copper prices in the recent months.
Notwithstanding the recent recovery in copper prices, the impacts of lower year over year average realized copper prices are likely to reflect on Freeport’s first-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.
Freeport-McMoRan Inc. Price and EPS Surprise
Freeport-McMoRan Inc. price-eps-surprise | Freeport-McMoRan 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 too have the right combination of elements to post an earnings beat this quarter:
United States Steel Corporation X, slated to release earnings on Apr 27, has an Earnings ESP of +1.79% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for U.S. Steel’s first-quarter earnings has been revised 124.6% upward in the past 60 days. The Zacks Consensus Estimate for X’s earnings for the quarter is pegged at 63 cents.
Axalta Coating Systems Ltd. AXTA, slated to release earnings on May 2, has an Earnings ESP of +4.35%.
The consensus estimate for Axalta Coating Systems’ earnings for the first quarter is currently pegged at 31 cents. AXTA currently carries a Zacks Rank #3.
Ternium S.A. TX, scheduled to release earnings on Apr 25, has an Earnings ESP of +10.85% and currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for TX’s first-quarter earnings has been revised 58% upward in the past 60 days. The consensus estimate for TX’s earnings for the first quarter is currently pegged at 98 cents.
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Freeport-McMoRan Inc. (FCX) : Free Stock Analysis Report
United States Steel Corporation (X) : Free Stock Analysis Report
Ternium S.A. (TX) : Free Stock Analysis Report
Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report
