Freeport-McMoRan 3rd-Quarter Profit Edges Down on Derivatives Impacts
By Tess Stynes
Freeport-McMoRan Copper & Gold Inc.'s (FCX) third-quarter earnings edged down on negative oil-and-gas derivatives impacts, while weaker copper and gold prices weighed on revenue growth.
Still, shares were up 4.4% at $36.60 in recent premarket trading as the results beat expectations. Through Monday's close, the stock is up 2.5% this year.
The latest period included the first full quarter of results from its recent acquisition of Plains Exploration & Production Co. and McMoRan Exploration Co.--two oil companies with which it has close ties.
Freeport-McMoRan has been striving to cut costs and reiterated that it is aiming to reduce capital spending plans by $ 1.9 billion through next year, following the recent acquisition. The cash-and-stock deal initially had been valued at about $9 billion with about $11 billion in assumed debt.
The company also is reviewing its portfolio of assets for opportunities for potential divestitures, joint ventures or other moves to improve its balance sheet.
Freeport-McMoRan reported a profit of $821 million, 79 cents a share, down from $824 million, or 86 cents a share, a year earlier. The latest period included nine cents a share for unrealized losses on oil- and gas-derivative contracts. Revenue increased 40% to $6.17 billion.
Analysts polled by Thomson Reuters recently expected per-share earnings of 62 cents and revenue of $5.69 billion.
Sales volumes for copper, gold and molybdenum all increased, though copper and gold volumes were lower than expected, amid lower production in South America. The timing of shipments in Indonesia also contributed to the shortfall on gold volume.
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