Will Freeport-McMoRan's Earnings Shine?

2013 is here, and earnings season has already started ramping up. The key to making smart investment decisions with stocks releasing their quarterly 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 Freeport-McMoRan Copper & Gold (NYSE: FCX  ) . The mining company has thrived during the long boom in commodities, but its controversial proposed buyout of two companies with which it shares some upper-level corporate leaders threw a wrench in the stock's performance. Let's take an early look at what's been happening with Freeport-McMoRan Copper & Gold over the past quarter and what we're likely to see in its quarterly report next Tuesday morning.

Stats on Freeport-McMoRan Copper & Gold

Analyst EPS Estimate

$0.77

Change from Year-Ago EPS

15.0%

Revenue Estimate

$4.63 billion

Change from Year-Ago Revenue

11.3%

Earnings Beats in Past 4 Quarters

3

Source: Yahoo Finance.

Will Freeport-McMoRan Copper & Gold's earnings impress investors?
Analysts have been gradually cutting their expectations for Freeport-McMoRan's current quarter, with earnings-per-share estimates having fallen by $0.16 per share in the past three months. That tracks very closely with the 13% drop in shares since mid-October.

As its name suggests, Freeport's earnings are highly dependent on the environment for gold and copper prices. Copper has actually rebounded from low prices during the summer, and although gold has slowly given back its gains from a September price spike, its average for the quarter appears likely to surpass its previous quarter. Favorable copper prices have definitely been a big part of rival Southern Copper's (NYSE: SCCO  ) 20% share-price gain, and more broadly, the GlobalX Copper Miners ETF (NYSEMKT: COPX  ) has seen similar strength in its shares over the past quarter.

But what's foremost on Freeport investors' minds is the company's proposed buyout of McMoRan Exploration (NYSE: MMR  ) and Plains Exploration & Production (UNKNOWN: PXP.DL2  ) . With McMoRan Exploration having seen its share price plunge over continuing challenges with its Davy Jones well in the Gulf of Mexico, the buyout seems ill-timed. Some have pointed to shared roles among the company as potential conflicts, including Freeport Chairman James Moffett's role as CEO and co-chairman of McMoRan and Plains CEO James Flores sitting on the McMoRan board.

A strong earnings report could finally start to take attention away from the deal. Still, it would take a lot for some investors to get the bad taste of the Plains and McMoRan acquisitions out of their mouths.

Learn more
Get the latest on Freeport's blockbuster deal to expand into the oil and natural gas industry by reading our premium report on the stock. Inside, you'll discover more about Freeport's profitable copper business and its latest foray to compete with industry giants. Click here now to gain instant access!

Click here to add Freeport-McMoRan Copper & Gold to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


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Related Tickers

10/24/2014 4:03 PM
FCX $30.80 Down -0.16 -0.52%
Freeport-McMoRan C… CAPS Rating: ****
COPX $8.31 Down -0.04 -0.48%
Global X Copper Mi… CAPS Rating: *****
MMR $0.00 Down +0.00 +0.00%
McMoRan Exploratio… CAPS Rating: ****
PXP.DL2 $0.00 Down +0.00 +0.00%
Plains Exploration… CAPS Rating: ***
SCCO $29.26 Down -0.03 -0.10%
Southern Copper Co… CAPS Rating: ****

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