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Mining Stocks' Q3 Earnings Slated For Oct 25: FCX, SCCO

We are in the busiest week of the third-quarter earnings season, with a wide swath of companies on the S&P 500 index reporting their quarterly numbers this week.

Total earnings for the 116 S&P 500 members that reported till last Friday were up 3.3% year over year on 1.8% higher revenues, per the latest Earnings Preview report. The overall growth picture has finally turned positive with total third-quarter earnings now expected to nudge up 0.1%. Revenues are also expected to rise 1.5%. The pace of growth is likely to improve moving ahead.

If this happens, the third quarter will mark the first quarter of earnings growth after five straight quarters of decline for the benchmark index.

In this write-up, we put the spotlight on a couple of mining companies that are slated to report on Tuesday, Oct 25. The mining sector was roiled by lower commodity prices last year. However, gold and silver have been major movers this year, supported by volatile equity markets, Brexit-induced chaos in the global markets and a dovish U.S. Federal Reserve.

The mining industry falls under the broader Basic Materials sector. Among the seven out of the 16 Zacks sectors expected to see a fall in earnings this reporting cycle, the Basic Materials sector is one as it is projected to witness an earnings decline of 1.3% on 3.1% lower sales.

Let's see what's in store for these miners that are slated to report their third-quarter numbers on Oct 25.

Freeport-McMoRan, Inc.FCX , which will report ahead of the bell, has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate stand at 19 cents. This is what makes surprise prediction difficult even though the company carries a favorable Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here.

Freeport surpassed the Zacks Consensus Estimate in two out of the four trailing quarters, while missed in two, with the average surprise being negative 20.45%. The company is taking steps to manage costs and capital spending amid a challenging operating environment. It also remains focused on deleveraging its balance sheet, partly through assets sale. However, Freeport's copper business remains affected by a sluggish global economy and supply-related issues. The weak copper pricing environment also poses a headwind. (Read more: Freeport-McMoRan Q3 Earnings: A Beat in the Cards? )

FREEPT MC COP-B Price and EPS Surprise

FREEPT MC COP-B Price and EPS Surprise | FREEPT MC COP-B Quote

Southern Copper Corp.SCCO has an Earnings ESP of -13.79% as the Most Accurate Estimate stands at 25 cents while the Zacks Consensus Estimate is pegged at 29 cents. The stock carries a Zacks Rank #3, but its negative ESP makes surprise prediction difficult. Southern Copper delivered an average negative surprise of 2.36% over the last four quarters.

Armed with a strong balance sheet, Southern Copper is mainly looking at expansion plans. A number of the company's projects are ongoing and on schedule. Moreover, it is focused on cash management initiatives to reduce costs. However, the company faces headwinds stemming from a weak copper industry. (Read more: Southern Copper Q3 Earnings: What's in the Cards? )

SOUTHERN COPPER Price and EPS Surprise

SOUTHERN COPPER Price and EPS Surprise | SOUTHERN COPPER Quote

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FREEPT MC COP-B (FCX): Free Stock Analysis Report

SOUTHERN COPPER (SCCO): Free Stock Analysis Report

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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.


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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