Freeport-McMoRan Inc. FCX is set to release second-quarter 2020 results on Jul 23, before the opening bell. 

The company has a trailing four-quarter earnings surprise of 36.8%, on average. Considerable progress at Cerro Verde to restore operations is likely to have supported Freeport’s results in the to-be-reported quarter. 

The stock has gained 16.9% in the past year compared with the industry’s 9.8% rise.

Let’s see how things are shaping up for the upcoming announcement.

What to Expect in Q2?

Recently, Freeport issued an update on its second-quarter 2020 operational and financial performance.

Freeport expects copper sales to exceed its April 2020 estimate of 690 million pounds by around 8% in second-quarter 2020 and gold sales are expected to surpass the previous estimate of 165,000 ounces by around 10%.

In South America, Freeport achieved considerable progress at Cerro Verde during the second quarter to restore operations. Cerro Verde mill operations produced an average of 315,000 metric tons of ore per day during the second quarter.

In Indonesia, Freeport’s ramp-up of underground production at the Grasberg minerals district is continuing per schedule. In the second quarter, the Grasberg Block Cave and Deep MLZ underground mines together produced more than 54,000 metric tons of ore per day. Moreover, the mines’ average production was around 70,000 metric tons of ore per day at the end of June.

Assuming average copper price realization of $2.54 per pound in the second quarter, Freeport projects adjusted EBITDA to be around $650 million. It also expects to incur net loss before non-recurring items of around 3 cents per share.

What does the Estimates Indicate?

The Zacks Consensus Estimate for Freeport’s second-quarter consolidated revenues is currently pegged at $3,204 million, which suggests a year-over-year decline of 9.6%.

The Zacks Consensus Estimate for second-quarter consolidated net cash costs per pound of copper is currently pegged at $1.59, which suggests a 17.2% fall on a year-over-year basis. The same for average realized price for copper stands at $2.24 per pound, which calls for a 18.5% decline year over year.

The consensus mark for consolidated copper sales for the second quarter is pegged at 691 million pounds, which calls for a sequential fall of 5.2%.

What Does the Zacks Model Say?

Our proven model doesn’t predict an earnings beat for Freeport this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Freeport is -4.00%. The Zacks Consensus Estimate is currently pegged at a loss of 3 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Freeport currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Likely to Beat Estimates

Here are some companies that you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Barrick Gold Corporation GOLD, scheduled to release second-quarter 2020 earnings on Aug 10, has an Earnings ESP of +1.37% and carries a Zacks Rank #3.

Kinross Gold Corporation KGC, slated to release second-quarter 2020 earnings on Jul 29, has an Earnings ESP of +1.96% and carries a Zacks Rank #3.

Pan American Silver Corp. PAAS, scheduled to release second-quarter 2020 results on Aug 5, has an Earnings ESP of +38.75% and carries a Zacks Rank #3.

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