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What to Watch When Freeport-McMoRan Reports

Photo credit: Flickr/Jim Sneddon 

Freeport-McMoRan (NYSE: FCX  ) is expected to report its second-quarter results on Wednesday. The global resources company is expected to report $5.24 billion in revenue and earnings of $0.49 per share. If Freeport-McMoRan is going to impress investors this quarter, it will need to at least meet estimates.

In order to hit its targets, Freeport-McMoRan's earnings will again need to be fueled by its oil and gas subsidiary. Last quarter, surging production from Freeport-McMoRan's energy subsidiary fueled an earnings beat. However, it will be difficult for that subsidiary to deliver a repeat performance this quarter as Freeport-McMoRan sold its Eagle Ford Shale assets to Encana (NYSE: ECA  ) during the quarter. The strong production from those assets were one of the secrets to Freeport-McMoRan's first quarter success.

Selling its Eagle Ford Shale assets to Encana wasn't the only change Freeport-McMoRan made to its energy portfolio in the quarter. The company also acquired some of Apache's (NYSE: APA  ) Gulf of Mexico assets. However, the land rights it acquired from Apache won't be delivering any oil production this quarter as the development and exploration projects aren't producing any oil at this point.

Because of that, investors will need to look past the company's headline numbers this quarter and really dig deep into the company's results. To help investors know where to look, I created the following slideshow presentation. The presentation provides a few more details on the transformation of Freeport-McMoRan's oil and gas business as well as another big area investors need to watch.

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Matt DiLallo

Matthew is a Senior Energy and Materials Specialist with The Motley Fool. He graduated from the Liberty University with a degree in Biblical Studies and a Masters of Business Administration. You can follow him on Twitter for the latest news and analysis of the energy and materials industries:

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Related Tickers

9/2/2015 4:03 PM
FCX $9.90 Up +0.13 +1.33%
Freeport-McMoRan C… CAPS Rating: ****
APA $43.22 Up +0.09 +0.21%
Apache Corp CAPS Rating: ****
ECA $6.83 Up +0.01 +0.15%
EnCana Corp (USA) CAPS Rating: ***