Freeport-McMoRan misses by $0.10, beats on revs
Reports Q4 (Dec) earnings of $0.25 per share, $0.10 worse than the Capital IQ Consensus Estimate of $0.35; revenues fell 11.0% year/year to $5.24 bln vs the $4.89 bln consensus.
- Fourth-quarter 2014 consolidated copper sales of 972 million pounds were lower than Q4 2013 sales of 1.14 billion pounds, primarily reflecting the sale of Candelaria in November 2014 and lower sales from Cerro Verde and Indonesia, partly offset by higher sales from North America.
- Fourth-quarter 2014 sales were ~3% lower than the October 2014 estimate of 1.0 billion pounds, primarily reflecting lower production from Indonesia as a result of labor-related work stoppages during the period.
- Fourth-quarter 2014 sales from oil and gas operations of 12.1 MMBOE, including 8.1 million barrels (MMBbls) of crude oil, 20.9 billion cubic feet (Bcf) of natural gas and 0.6 MMBbls of natural gas liquids (NGLs), were lower than fourth-quarter 2013 sales of 16.6 MMBOE because of the sale of the Eagle Ford properties in June 2014, but were higher than the October 2014 estimate of 11.5 MMBOE, reflecting strong well performance and reduced downtime.
- FCX is taking aggressive actions to reduce or defer capital expenditures and other costs and has initiated efforts to obtain third-party funding for a significant portion of its oil and gas capital expenditures to maintain financial strength and flexibility in response to recent sharp declines in oil prices.
- In addition, FCX is monitoring copper markets and will be responsive to market conditions. As a first step, FCX has reduced budgeted 2015 capital expenditures, exploration and other costs by a total of $2 billion.
- Following the recent sharp decline in oil prices, FCX has taken steps to significantly reduce capital spending plans and near-term oil and gas growth initiatives in order to preserve cash flows and resources for anticipated improved market conditions in the future.
- Operating cash flows totaled $1.1 billion for fourth-quarter 2014 and $5.6 billion (net of $0.6 billion in working capital uses and changes in other tax payments) for the year 2014.
- Based on current sales volume and cost estimates and assuming average prices of $2.60 per pound for copper, $1,300 per ounce for gold, $9 per pound for molybdenum and $50 per barrel for Brent crude oil, operating cash flows for the year 2015 are estimated to ~ $4 billion.