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Why Freeport-McMoRan Copper & Gold Inc. (FCX) Earnings Won’t Help Its Stock

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Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX)Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) will release its quarterly report next Tuesday, and everything you need to know about how the stock has done lately is in the company’s name. With gold having plunged and copper seeing similar challenges, Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) earnings will be way down this quarter. But the company is hoping to see a rebound in the near future as its major new acquisitions add energy exposure to Freeport’s overall mix.

Freeport is a massive player in the copper market, which has helped the company do extremely well during the emerging-market-led run-up in commodity prices over the past several years. But more recently, slowdowns in those same emerging markets have led to a big deceleration in growth, and that has sent prices of copper and other industrial metals into the basement. Let’s take an early look at what’s been happening with Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) over the past quarter and what we’re likely to see in its quarterly report.

Stats on Freeport-McMoRan

Analyst EPS Estimate $0.43
Change From Year-Ago EPS (47%)
Revenue Estimate $4.36 billion
Change From Year-Ago Revenue (2.6%)
Earnings Beats in Past 4 Quarters 3

Source: Yahoo! Finance.

Why investors are scared of Freeport-McMoRan earnings
Analysts have slashed their views on Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) earnings in recent months, cutting their June-quarter estimates by more than half and reducing the full-year 2013 earnings calls by more than $1 per share. After a big plunge for the shares earlier this year, though, the stock has stabilized, rising about 2% since mid-April.

Part of the reason Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) stock hit bottom was that its first-quarter earnings turned out better than many had expected. Better-than-expected copper sales offset big price declines at least in part, and although revenue dropped very slightly, the company was able to limit its earnings declines and do better than investors had feared.

Freeport also got more good news last month from the Indonesian government, as the company was allowed to reopen its key Grasberg gold and copper mine despite open investigations about accidents in May in which dozens of workers died. Grasberg probably won’t get back to full operation until August, but the mine is an essential part of Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX)’s future, and so the company needs to make sure its long-term viability remains sustainable.

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