(PD) - Over the past 16 quarters, the company managed to surprise to the upside on 12 occasions

Phelps Dodge Corporation (PD), a Zacks #1 Rank stock, topped the Street's earnings estimate in six out of the past eight quarters, most recently by 27.3%. Consensus estimates have been on the rise for both 2006 and 2007. The company has a price-to-book ratio of 3.0, compared to 5.2 for the market. PD's PEG ratio sits at 0.65 and the company has a current dividend yield of 0.98%. Full Analysis Phelps Dodge Corporation is one of the world's leading producers of copper. The company is also a world leader in the production of molybdenum, and the largest producer of molybdenum-based chemicals and continuous-cast copper rod. PD has two divisions, Phelps Dodge Mining Company and Phelps Dodge Industries. PD exceeded analysts' earnings expectations in six out of the past eight quarters by an average margin of 11.8%. Over the past 16 quarters, the company managed to surprise to the upside on 12 occasions. On Jul 26, PD crushed the Street's second-quarter earnings estimate of $3.85 per share when it reported profits of $4.90 per share. This amounted to a 27.3% positive earnings surprise and soared past its results in the prior-year period by 116.8%. Revenues ballooned to $2.99 billion from $1.97 billion a year earlier. PD and Inco Limited (N) called off their planned merger on Sep 5. The two companies, along with Falconbridge Ltd., had agreed to a three-way combination in a deal that would have resulted in a dominant copper and nickel producer in the North American market. However, Falconbridge was scooped up by Anglo-Swiss mining company Xstrata PLC, while Inco received a very attractive $17 billion offer from Brazilian mining giant Companhia Valo de Rio Dolce SA. Analysts had voiced their concerns about potential integration risks for PD if the deal was actually finalized. The company was recently listed as number 27 on Fortune's 2006 list of the 100 Fastest-Growing Companies. PD's profits surged 199% and revenues climbed 35% with a stock return of 68% on average annually over the past three years. Analysts' optimism about PD's future earnings prospects has been on the rise. Consensus estimates for this quarter and next quarter are up 16.7% and 15.3%, respectively, over the past 60 days. Profit forecasts for the full years of 2006 and 2007 jumped 8.7% and 21.6%, respectively, over the same period of time. PD is currently trading at a valuation of 7.5x trailing 12-month earnings and at 5.1x current fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 16.8x trailing 12-month earnings and at 15.8x its current fiscal-year estimated earnings. The company has a price-to-book ratio of 3.0, compared to 5.2 for the market. PD's PEG ratio currently sits at 0.65. PD has a current dividend yield of 0.98%. The company's return on equity of 39% is in line with the industry average. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. | Blog Home| VitalStocks Home