Freeport Copper’s Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Freeport Copper (NYSE:FCX) will unveil its latest earnings on Thursday, July 19, 2012. Freeport-McMoRan Copper & Gold is an international company that mines copper, gold and molybdenum.

Freeport Copper Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 82 cents per share, a decline of 45% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 94 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 87 cents during the last month. For the year, analysts are projecting net income of $3.82 per share, a decline of 21.1% from last year.

Past Earnings Performance: The company has beaten estimates the last two quarters and is coming off a quarter where it topped the forecasts by 11 cents, reporting profit of 96 cents per share against a mean estimate of net income of 85 cents. In the fourth quarter of the last fiscal year, the company exceeded forecasts by 3 cents with profit of 67 cents versus a mean estimate of net income of 64 cents.

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A Look Back: In the first quarter, profit fell 49% to $764 million (80 cents a share) from $1.5 billion ($1.57 a share) the year earlier, but exceeded analyst expectations. Revenue fell 19.3% to $4.61 billion from $5.71 billion.

Wall St. Revenue Expectations: Analysts predict a decline of 22.4% in revenue from the year-earlier quarter to $4.51 billion.

Stock Price Performance: Between April 18, 2012 and July 13, 2012, the stock price fell $5.06 (-13.2%), from $38.29 to $33.23. The stock price saw one of its best stretches over the last year between August 22, 2011 and August 31, 2011, when shares rose for eight straight days, increasing 13.2% (+$5.51) over that span. It saw one of its worst periods between May 7, 2012 and May 18, 2012 when shares fell for 10 straight days, dropping 12.6% (-$4.59) over that span.

Key Stats:

The company is trying to use this earnings announcement to rebound from profit declines in the last three quarters. Net income fell 10.6% in the third quarter of the last fiscal year, by 58.7% in the fourth quarter of the last fiscal year and again in the first quarter.

On the top line, the company is hoping to use this earnings announcement to snap a string of two-straight quarters of revenue declines. Revenue fell 25.7% in the fourth quarter of the last fiscal year and dropped again in the first quarter.

Analyst Ratings: With 16 analysts rating the stock a buy, none rating it a sell and none rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 3.51 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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