On Aug 23, Zacks Investment Research downgraded mining company
Freeport McMoRan Copper and Gold Inc.
) to a Zacks Rank #5 (Strong Sell).
Freeport posted mixed second-quarter 2013 results on Jul 23
with adjusted earnings topping the Zacks Consensus Estimate while
sales missed the same. The company reported earnings of 49 cents
per share in the quarter, a decline of 33.8% from the year-ago
earnings of 74 cents. However, it beat the Zacks Consensus
Estimate of 41 cents. Profit slid 32% year over year to $482
million, hurt by lower gold and copper pricing.
Revenues fell roughly 4.2% year over year to $4.29 billion in
the second quarter, missing the Zacks Consensus Estimate of $4.45
billion. Gold sales fell to 173,000 ounces of gold from 266,000
ounces in the prior-year quarter due to temporary suspension of
operations in Indonesia following an accident.
Freeport's average realized price per ounce of gold also fell
to $1,322 from $1,588 a year ago, while average realized price
per pound for copper declined to $3.17 from $3.53 in the
Although Freeport has a number of potential growth drivers, it
is facing a number of bottlenecks in developing them. Higher
production cost and weak pricing remain concerns for Freeport as
these may continue to weigh on its bottom line. Ramp up
activities at Morenci and Chino are driving the cost higher. The
company saw higher unit costs across its North American, South
American and Indonesia operations in the second quarter.
Freeport's copper business remains affected by the sluggish
global economy. Copper markets remain soft given the slowing
growth in the U.S. and the difficult market conditions in Europe.
Demand from key end markets, including construction materials and
electronics, still remain weak.
The Zacks Consensus Estimate for 2013 for Freeport has gone
down 8.2% to $2.45 per share. Similarly, the Zacks Consensus
Estimate for 2014 has decreased 4.4% to $3.28 per share.
Other Stocks to Consider
Other companies in the mining industry with favorable
Zacks Rank are
Kumba Iron Ore Ltd.
), with a Zacks Rank #1 (Strong Buy), as well as
Avalon Rare Metals Inc.
), each carrying a Zacks Rank #2 (Buy).
AVALON RARE MTL (AVL): Free Stock Analysis
DRDGOLD LTD (DRD): Get Free Report
FREEPT MC COP-B (FCX): Free Stock Analysis
KUMBA IRON ORE (KIROY): Get Free Report
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