2013 is here, and earnings season has already started ramping up. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Let's turn to McMoRan Exploration (NYSE:MMR). The exploration, development, and production company has had a tumultuous quarter, with ongoing difficulties on a key project giving way to excitement over a potential takeover. But will its earnings report have an impact on the company's merger plans? Let's take an early look at what's been happening with McMoRan Exploration over the past quarter and what we're likely to see in its quarterly report Friday morning.

Stats on McMoRan Exploration



Analyst EPS Estimate


Year-Ago Quarter's EPS


Revenue Estimate

$90.7 million

Change from Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Will McMoRan Exploration investors like what they see?
McMoRan has lost money in each of the past three quarters, and it looks likely that it will make it four in a row this time around. In fact, analysts expect losses throughout 2013 as well, and arguably the only reason the stock has risen by about a third over the past three months is that the company got a buyout offer that's far too good to refuse.

McMoRan had two important things happen during the fourth quarter. On the negative side, continuing delays at its Davy Jones No. 1 well in the Gulf of Mexico raised big fears that the well may not prove to be as lucrative as investors had originally thought. When the company postponed flow tests in late November until it could unclog the well, McMoRan's shares lost a third of their value in two days as investors started to wonder if it will have to abandon the well entirely. As of late December, it still hadn't managed to get the well unblocked.

But the other huge news McMoRan got was that Freeport-McMoRan Copper & Gold (NYSE:FCX) made a buyout offer for McMoRan and Plains Exploration & Production (UNKNOWN:PXP.DL). The deal marks a new move for Freeport to get into oil and gas development, but given the shared relationships among executives of the three companies, some investors wonder whether conflict of interest motivated the deal. In any event, it's hard to argue that McMoRan shareholders got the short end of the stick, as shares have doubled from their lows and remain high.

Unless some surprising fact comes out of McMoRan's earnings report that gives Freeport a chance to get out of the deal, this quarter's earnings release won't mean much to McMoRan shareholders. Going forward, though, Freeport shareholders need to look closely at what McMoRan says about its well status to see if they have any chance of getting their money's worth.

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Fool contributor Dan Caplinger owns shares of Freeport-McMoRan Copper & Gold. You can follow him on Twitter @DanCaplinger. The Motley Fool owns shares of Freeport-McMoRan Copper & Gold. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.