Freeport (FCX) to Report Q1 Earnings: What's in the Offing?

Freeport-McMoRan Inc. FCX is set to release first-quarter 2024 results before the opening bell on Apr 23.

The mining giant’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 21.5%, on average. Freeport is expected to have gained from its efforts to increase mining rates, the strength in copper prices and lower costs in the first quarter.

The stock has gained 18.9% in the past year compared with the industry’s 25.1% rise.


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


What do the Estimates Indicate?

For the first quarter of 2024, Freeport expects sales volumes to be 1 billion pounds of copper, 575,000 ounces of gold, and 20 million pounds of molybdenum.

The Zacks Consensus Estimate for Freeport’s first-quarter consolidated revenues is currently pegged at $5,613 million, which suggests a year-over-year increase of 4.2%.

A Few Factors to Watch

Freeport is likely to have benefited from improved costs in the quarter to be reported. It is seeing improving trends for several of its commodity-based input costs and remains focused on managing costs and improve productivity. Our estimate for first-quarter consolidated net cash costs per pound of copper currently stands at $1.55, which indicates a year-over-year decrease of 11.9%.

Moreover, continued strong performance at PT Freeport Indonesia and efforts to increase operating rates are likely to have aided the company’s copper volumes in the quarter to be reported. FCX is expected to have witnessed improved volumes in its Grasberg operations in the March quarter on higher mining rates and ore grades. The company is also likely to have benefited from strong milling rates in South America. Our estimate for consolidated copper sales for the first quarter is 1,001 million pounds, suggesting a year-over-year increase of 20.3%.

Freeport’s first-quarter results are also expected to have been supported by the strength in copper prices. Copper prices have gained more than 12% so far this year and are currently trading at the levels last seen in June 2022. Prices of the red metal surged to their highest level in seven months in mid-March after China’s biggest copper smelters agreed to reduce production. China's top smelters agreed to cut production at some loss-making plants driven by raw material shortages. Rising demand on the back of a recovery in China’s industrial sector has also contributed to the surge in copper prices.


Freeport-McMoRan Inc. Price and EPS Surprise


Freeport-McMoRan Inc. Price and EPS Surprise

Freeport-McMoRan Inc. price-eps-surprise | Freeport-McMoRan 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 -14.86%. The Zacks Consensus Estimate for earnings for the first quarter is currently pegged at 31 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:

Agnico Eagle Mines Limited AEM, scheduled to release earnings on Apr 25, has an Earnings ESP of +5.02% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for AEM’s earnings for the first quarter is currently pegged at 55 cents per share.

Dow Inc. DOW, slated to release earnings on Apr 25, has an Earnings ESP of +2.28% and carries a Zacks Rank #3 at present.

The consensus mark for DOW’s first-quarter earnings is currently pegged at 47 cents.

Nucor Corporation NUE, scheduled to release first-quarter earnings on Apr 22, has an Earnings ESP of +0.64%.

The Zacks Consensus Estimate for NUE's earnings for the first quarter is currently pegged at $3.62. NUE currently carries a Zacks Rank #3.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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