Freeport Copper Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Freeport Copper (NYSE:FCX) will unveil its latest earnings on Monday, October 22, 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 net income of 75 cents per share, a decline of 31.8% 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 91 cents. Between one and three months ago, the average estimate moved down. It has risen from 73 cents during the last month. Analysts are projecting profit to rise by 28.5% compared to last year’s $3.46.

Past Earnings Performance: The company missed estimates last quarter after beating forecasts in the prior two. In the second quarter, the company reported profit of 74 cents per share versus a mean estimate of net income of 75 cents per share. In the first quarter, the company beat estimates by 11 cents.

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A Look Back: In the second quarter, profit fell 48.1% to $710 million (74 cents a share) from $1.37 billion ($1.43 a share) the year earlier, missing analyst expectations. Revenue fell 23% to $4.47 billion from $5.81 billion.

Stock Price Performance: Between July 23, 2012 and October 16, 2012, the stock price rose $8.85 (27.1%), from $32.62 to $41.47. The stock price saw one of its best stretches over the last year between September 5, 2012 and September 14, 2012, when shares rose for eight straight days, increasing 21% (+$7.39) 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.

Wall St. Revenue Expectations: Analysts predict a decline of 16% in revenue from the year-earlier quarter to $4.37 billion.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of three-straight quarters of revenue declines. Revenue fell 25.7% in the fourth quarter of the last fiscal year and 19.3% in first quarter before falling again in the second quarter.

The company is trying to stem some negative momentum heading into this earnings announcement. Profit has dropped by a year-over-year average of 41.6% over the past four quarters.

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 3.46 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. The company regressed in this liquidity measure from 3.51 in the first quarter to the last quarter driven in part by a decrease in current assets. Current assets decreased 0.7% to $10.18 billion while liabilities rose by 0.6% to $2.94 billion.

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

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