A Closer Look at Freeport-McMoRan’s 3Q15 Earnings



3Q15 earnings call

Freeport-McMoRan (FCX) released its 3Q15 financial results on October 22. The company reported a loss of $3.8 billion that translates into a per-share loss of $3.58. However, the loss includes an impairment of oil and gas properties and goodwill to the tune of $3.7 billion. After adjusting for this charge, Freeport-McMoRan reported an adjusted loss per share of $0.15.

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Earnings miss estimates

Freeport-McMoRan’s adjusted net loss came in higher than Wall Street estimates. The company has missed analyst EPS estimates in three out of the last five quarters, as you can see in the graph above. Freeport-McMoRan stock was volatile after the earnings release. The stock opened lower but subsequently gained more than 6.5% intraday. Finally, it closed with modest gains of 0.6%.

Companies in the commodity (DBC) space, including Glencore (GLNCY), have been on a downward spiral this year. Although stock prices have recovered somewhat in the last couple of weeks, they’re still much lower on a year-to-date basis.

Teck Resources (TCK) and Vale (VALE) also reported their 3Q15 financial results on October 22. Teck Resources posted a loss in the quarter on asset write-downs. Vale also posted a loss, of $2 billion, on lower iron ore prices.

Series overview

In this series, we’ll explore Freeport-McMoRan’s 3Q15 earnings in detail. We’ll also discuss what factors could drive Freeport’s earnings in the coming quarters. We’ll cover the key points from the company’s 3Q15 earnings conference call. Towards the end of this series, we’ll also do a valuation analysis. This should help you understand how Freeport-McMoRan could play out in the coming quarters.


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