Freeport-McMoRan Inc (NYSE: FCX)
Freeport-McMoRan has a big day coming up tomorrow, and it’s one that I believe will be overwhelmingly positive. That’s because the company will be reporting its results for the second quarter before the opening bell tomorrow. Today, we’ll talk about what analysts are expecting to see, why I believe that analysts have missed the mark, what I’m expecting to see, and what we can expect from FCX moving forward. So, let’s get right to it…
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Analysts Aren’t Expecting Much Of A Positive Quarter From FCX
As mentioned above, Freeport-McMoRan will be reporting its earnings for the second quarter tomorrow before the opening bell. When it comes to analysts views, the report isn’t likely to be a very positive one. In fact, According to NASDAQ and based on 11 analysts forecasts, the overall consensus is that the company will produce a loss of $0.01 per share. This shows a massive decline from the gain of $0.14 per share realized in the same quarter last year, but strong growth from the loss of $0.16 per share realized last quarter.
I Believe That Analysts Have Missed The Mark
While I understand the relatively bearish views held by analysts, I have to say that I believe they’ve missed the mark in this case. The reality is that the second quarter was likely an incredibly positive one for FCX. You see, the company is focused on mining basic materials. The vast majority of its revenue comes from mining copper. The second quarter was a positive one for copper, as the Chinese economy started to see a boost, leading to higher demand from the world’s largest consumer of the metal.
In fact, through the company’s entire product portfolio, oil, which accounts for a very small percentage of revenue, is the only product that didn’t have a strong quarter. With that considered, I’m expecting that the revenue from the company’s sales will top expectations, leading to positive earnings and exciting investors.
What I’m Expecting To See Moving Forward
Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from FCX. The company has faced a hard time over the past year as the prices of commodities continued to fluctuate. However, in the second quarter, we saw quite a bit of strong news surrounding copper and gold. Between the two, these commodities make up about 70% of the company’s total revenue. Considering the strong news surrounding the products sold by Freeport-McMoRan, I’m expecting incredibly strong results this quarter. As a result, we should see strong movement in the market tomorrow and in the short run.
Also, in the long run, my opinion remains relatively bullish. While FCX may run into headwinds as global economic concerns continue to shake and shape the market, in the long run the company is well positioned for solid growth. Copper and gold are likely to continue heading upward for some time to come. The excess gains on these commodities will likely act as a hedge to the slight losses the company might see in the oil segment. All in all, things are looking great for FCX moving forward.
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What Do You Think?
Where do you think FCX is headed moving forward? Join the discussion at TalkTRENDZ from CNA Finance!
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