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Will Freeport-McMoRan’s 4Q15 Earnings Calm Worried Investors?

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Freeport-McMoran’s 4Q15 earnings

Freeport-McMoRan (FCX) is expected to release its 4Q15 earnings on January 26. The company’s earnings will come as the company fights for survival. It lost 70% of its market capitalization last year. Investors waiting for a respite from the last year’s fall were in for a disappointment. Freeport-McMoRan and other copper producers resumed their downslide right at the beginning of the year. The company has seen a downward price movement of 35% so far in 2016.

Other copper producers—including Southern Copper (SCCO), Teck Resources (TCK), and Turquoise Hill Resources (TRQ)—have also seen downward price movements in 2016. See the graph above.

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Series overview

In this series, we’ll explore what Wall Street analysts expect from Freeport-McMoRan’s 4Q15 earnings. We’ll also explore what the markets expect from Freeport-McMoRan’s 4Q15 earnings conference call. With markets getting jittery over the company, the 4Q15 earnings call will provide an opportunity to the company’s management to allay some investor fears.

Meanwhile, Freeport-McMoRan investors should keep their seat belts on ahead of what looks like another roller coaster year for the company. You can read An Investor’s Guide to Freeport-McMoRan’s 2016 outlook to find out what will drive the company in 2016.

Freeport-McMoRan generally tends to be quite volatile during its quarterly earnings releases. In 3Q15, Freeport-McMoRan’s adjusted net loss came in higher than Wall Street estimates. Its stock was volatile after the earnings release. The stock opened lower but then gained over 6.5% intraday. Finally, it closed with modest gains of 0.6%. The stock had tumbled 10% after the company’s 2Q15 earnings missed analyst estimates.

In the next part of this series, we’ll explore what analysts are expecting from the company’s 4Q15 earnings.

You can also consider the Materials Select Sector SPDR ETF (XLB) to get diversified exposure to the materials sector. Metal producers currently form ~9% of XLB’s portfolio.

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