BloggingStocks

Freeport-McMoRan's Forecast Overshadows Strong Quarter

Tom Taulli — Thu, 20 Jan 2011 11:30:00 EST

Filed under: Freep't McMoRan Copper (FCX)

With the surge in copper prices -- and other industrial and precious metals -- it was no surprise that Freeport-McMoRan Copper & Gold (FCX) had a great quarter. Net income rose 60% to $1.55 billion or $3.25 per share. Excluding a $0.01 charge, the earnings handily beat the consensus of $3.03. As for the top line, revenues increased 22% to $5.6 billion. The Street estimate was for $5.47 billion.

Despite all this, the stock was off nearly 6% early Thursday. No doubt, one reason is that it has had a strong run over the past few months and the valuation was getting overextended.

Continue reading Freeport-McMoRan's Forecast Overshadows Strong Quarter

Freeport-McMoRan's Forecast Overshadows Strong Quarter originally appeared on BloggingStocks on Thu, 20 Jan 2011 11:30:00 EST. Please see our terms for use of feeds.

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Freeport suspends dividend, cuts production on lower demand, prices

Joseph Lazzaro — Wed, 03 Dec 2008 08:58:00 EST

Filed under: Freep't McMoRan Copper (FCX), Commodities, Recession

Just call it another data point confirming the breadth and depth of the global economic slowdown. Freeport-McMoRan Wednesday suspended its dividend and cut production by 5% in 2009 and 11% in 2010, due to a sharp decline in prices, the company announced (pdf).

Freeport said it will reduce capital spending by $1.2 billion, a gargantuan 50% reduction from its previous estimate for 2009 capital spending. The company also suspended its $2 annual dividend.

Shares of Freeport (NYSE: FCX) Tuesday closed up 91 cents to $21.82 amid a broader market rally, but are declining $4.02, or over 18%, in premarket trading (8:27 am).

For the cutbacks, Freeport cited a large decrease in key commodity prices stemming from declining demand. Copper prices have declined to an average price of $1.69 per pound in November, compared to a nine-month average of $3.61 per pound as of September. Molybdenum prices have decline to $9 per pound as of December, compared to about $30 per pound in mid-October.

Continue reading Freeport suspends dividend, cuts production on lower demand, prices

Freeport suspends dividend, cuts production on lower demand, prices originally appeared on BloggingStocks on Wed, 03 Dec 2008 08:58:00 EST. Please see our terms for use of feeds.

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'Stuff' stocks look cheap?: Caterpillar, Freeport McMoRan, PACCAR

Todd Harrison — Tue, 25 Nov 2008 15:40:00 EST

Filed under: Caterpillar (CAT), Freep't McMoRan Copper (FCX), Bargain Stocks

This post was written by Minyanville contributor Vitaliy Katsenelson.

"You should buy Freeport McMoRan (NYSE: FCX), Caterpillar (NYSE: CAT), PACCAR (NASDAQ: PCAR)." That is what I hear from friends of mine, who are in the biz, all the time. They tell me how cheap these stocks are -- three, six, eight times earnings. "You are a value guy! How come you are not loading up on them?" they ask.

Let me tell you when I'll buy "stuff" stocks (if I ever do, because I've never really cared for the cyclicality of that business). It's when everyone stops telling me how cheap they are and that they are "buys."

These stocks are very similar to housing stocks two years ago: housing stocks were down 50% and looked cheap. Value managers bought just to see their stocks get cut in half again and again.

One needs to subnormalize earnings in this environment for all stocks, but stuff stocks need to see their earnings to be "sub-sub-sub-sub normalized." I've said it before, but it is worth repeating: the global economy just started its journey into a recession, and demand for stuff will drop off the cliff most likely to a lot greater degree than anyone imagines.

Continue reading 'Stuff' stocks look cheap?: Caterpillar, Freeport McMoRan, PACCAR

'Stuff' stocks look cheap?: Caterpillar, Freeport McMoRan, PACCAR originally appeared on BloggingStocks on Tue, 25 Nov 2008 15:40:00 EST. Please see our terms for use of feeds.

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Earnings highlights: Apple, Boeing, Microsoft, Yahoo!, UPS, American Express and others

Trey Thoelcke — Sat, 25 Oct 2008 12:10:00 EST

Filed under: Earnings Reports, Microsoft (MSFT), Yahoo! (YHOO), Apple Inc (AAPL), American Express (AXP), Boeing Co (BA), Coach Inc (COH), Kimberly-Clark (KMB), Sun Microsystems (JAVA), United Parcel'B' (UPS), RadioShack Corp (RSH), Texas Instruments (TXN), Freep't McMoRan Copper (FCX)

Here are some highlights from this past week's earnings coverage from BloggingStocks:

American Express Co. (NYSE: AXP) Q3 results were dragged down by charge-offs due to the recession.
Apple Inc. (NASDAQ: AAPL) posted stronger-than-expected results due in part to iPhone sales.
Boeing Inc. (NYSE: BA) posted a bigger-than-estimated earnings decline due in part to the strike.
Coach Inc. (NYSE: COH) reported Q1 earnings that were in line with Wall Street expectations.
Freeport-McMoRan (NYSE: FCX) Q3 results fell more than expected due to lower copper prices.
Kimberly-Clark Corp. (NYSE: KMB) edged past estimates but felt the squeeze from exchange rates.
McClatchy Co. (NYSE: MNI) reported dismal Q3 results as advertising revenues dry up.
Microsoft Corp. (NASDAQ: MSFT) posted solid Q1 results but offered conservative guidance.
New York Times Co. (NYSE: NYT) reported awful earnings and announced that it might cut its dividend.
Philip Morris International Inc. (NYSE: PM) topped profit estimates and maintained its guidance.
RadioShack Corp. (NYSE: RSH) better-than-expected results were driven by sales of digital TV converters.
Sun Microsystems Inc. (NASDAQ: JAVA) warned of a Q1 loss and acquisition-related charges.
Texas Instruments Inc. (NYSE: TXN) missed estimates due to slowing mobile phone sales.
United Parcel Service (NYSE: UPS) reported better-than-expected Q3 earnings.
Yahoo! Inc. (NASDAQ: YHOO) earnings tumbled in Q3 and it announced layoffs.

For more earnings highlights from this week, see Amazon, McDonald's, Mattel, Pfizer, AT&T, Sony and others.

Watch for upcoming quarterly reports from Verizon (NYSE: VZ), Estée Lauder (NYSE: EL) , US Steel (NYSE: X), Aetna (NYSE: AET), Procter & Gamble (NYSE: PG), Qwest (NYSE:Q), Comcast (NASDAQ: CMCSA), Kellogg (NYSE: K), Kraft Foods (NYSE: KFT), MetLife (NYSE: MET), Moody's (NYSE: MCO), Office Depot (NYSE: ODP), Avon (NYSE: AVP), CBS (NYSE: CBS), CVS Caremark (NYSE: CVS), Sun Microsystems (NASDAQ: JAVA), Eastman Kodak (NYSE: EK), Motorola (NYSE: MOT), Exxon Mobil (NYSE: XOM), Chevron (NYSE: CVX), Washington Post (NYSE: WPO).

Visit AOL Money & Finance for more earnings coverage.

Earnings highlights: Apple, Boeing, Microsoft, Yahoo!, UPS, American Express and others originally appeared on BloggingStocks on Sat, 25 Oct 2008 12:10:00 EST. Please see our terms for use of feeds.

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Cramer on BloggingStocks: Lots of stocks still haven't fallen enough

Jim Cramer — Thu, 23 Oct 2008 09:03:00 EST

Filed under: Market Matters, Freep't McMoRan Copper (FCX), Stocks to Sell, Cramer on BloggingStocks

TheStreet.com's Jim Cramer says the sellers are in control, and without dividend protection, we have no floor.

The bad stuff is in the market. It just has to get more in. That's all. That's the conclusion you have to reach when you see companies like Terex (NYSE: TEX) (Cramer's Take), which is valued at only a billion and a half dollars, or Joy Global (NASDAQ: JOYG) (Cramer's Take) at $2 billion and change or McDermott (NYSE: MDR) (Cramer's Take) at $3 billion.

In other words, forget about the stock prices. They are almost all absurd unless we are headed into a recession of such magnitude that companies start showing severe losses in the first quarter. Think about the market cap size. If Terex, which is actually a pretty good machinery company, can sell at a billion and a half dollars -- about the price that some acquisitive company might have paid for a division of Terex a year ago -- why can't it sell at $1 billion? How about $800 million? What's to stop it? The sellers at this point obviously don't even care about it, not one bit. They just want money. The buyers have had their heads twisted off and don't want anything more to do with it. No one wants to recommend it because the estimates are too high. And without a dividend, it has no protection; besides, people might perceive that the dividend can't be paid -- a la Freeport (NYSE: FCX) (Cramer's Take) -- and sell it anyway.

Continue reading Cramer on BloggingStocks: Lots of stocks still haven't fallen enough

Cramer on BloggingStocks: Lots of stocks still haven't fallen enough originally appeared on BloggingStocks on Thu, 23 Oct 2008 09:03:00 EST. Please see our terms for use of feeds.

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Fab Five: 5 promising stocks for patient investors

Joseph Lazzaro — Thu, 05 Jun 2008 14:50:00 EST

Filed under: Freep't McMoRan Copper (FCX), Stocks to Buy, Potash Corp. of Saskatchewan (POT)

In a challenging market amid an uncertain U.S. economic landscape, identifying long-term, promising investment opportunities becomes a difficult task. Further, to make the investment equation even more challenging, there's election risk, as well, with the 2008 U.S. Presidential election five months away.

Still, risk-adjusted investment opportunities exist. Accordingly, here's a 'Fab Five' that should rank with the best the equity markets have to offer, 3-5 years out.

(Note: Don't buy these stocks if you're interested in a short-term trade of six months or less. These are longer-term investments where the goal is a double-digit, average, annual, total return on equity over 3-5 years.)

Potash (NYSE: POT). Current Price: $212, p/e 47. Revised Stop Loss: $170. Potash remains the best of a very good fertilizer bunch, due to its 20% global market share in the namesake fertilizer. Consider buying POT on a pull-back to $202-203, but keep in mind Potash may not retreat to that level.

Mosaic (NYSE: MOS). Current Price: $132, p/e 40. Revised Stop Loss: $97. Mosaic also is well-positioned in phosphate and crop nutrients. Further, the fact that 66% of its revenue is internationally based is especially appealing, given the U.S. economic slowdown.

Transocean (NYSE: RIG). Current Price: $144, p/e 10. Revised Stop Loss: $110. RIG offers deepwater oil drilling services in all regions of the world, and it's an oil-thirsty world.

Freeport-McMoRan (NYSE: FCX). Current Price: $114, p/e 14. Revised Stop Loss: $69. Copper / gold / molybdenum miner Freeport is one of a handful of companies that have the economies of scale to compete in the global mining sector of the early 21st century, and it boasts impressive clients, to boot. Consider buying FCX on a pull-back to $111-113, but keep in mind Freeport may not retreat to that level.

CSX Corp. (NYSE: CSX). Current Price: $66, p/e 23. Revised Stop Loss: $48. Ride the railroad resurgence with this superior trade / commodity / freight transport company. The rails are in the transportation sweet spot: truck transport costs are rising with fuel costs, and the U.S. highway system is inadequate, with increased congestion likely, pending future investment.

Top Pick: Potash.

Safest Pick: CSX Corp.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

Fab Five: 5 promising stocks for patient investors originally appeared on BloggingStocks on Thu, 05 Jun 2008 14:50:00 EST. Please see our terms for use of feeds.

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Freeport is a top-tier miner

Joseph Lazzaro — Thu, 03 Apr 2008 14:06:00 EST

Filed under: Freep't McMoRan Copper (FCX), Commodities, Stocks to Buy

Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and a competitive advantage in established markets, preferably with a favorable global trend as a support. And with this in mind, Freeport-McMoran is worth a review.

Globally-oriented miner Freeport-McMoran (NYSE: FCX) is the world's second-largest copper producer and a major miner of gold and molybdenum. Further, FCX's purchase of Phelps Dodge in 2007 means that it has proven and probable reserves of: copper, 75 billion pounds; gold, 128 million ounces; and molybdenum, 1.9 billion pounds, net minority interests.

But perhaps most important, Freeport is one of only eight companies that have the economies of scale to compete in the global mining sector of the early 21st century. Look for continued merger/acquisition talk in the sector, but don't think of Freeport as an acquisition play: FCX has a large portion of the global copper market, geographical diversification, and enduring relationships with key customers, among other strengths, to continue to perform well in the years ahead. The Reuters F2008/F2009 EPS consensus estimates for FCX are $10.07/$11.07.

Further FCX's p/e of 12 is reasonable given its advantageous market position and prospects for growth. Don't expect Freeport's ascent to be perfect and calm, given its dependence on commodity prices, but that does not blot-out the secular trends that point to good things for FCX's in the years ahead.

The risks? Freeport's copper segment would be hurt by a global economic downturn.

The First Call mean rating for FCX is: Buy [19 firms]. Mean 2008 target: $117.00 [high: $135, low: $65.00].

Stock Analysis: Freeport is a moderate-risk stock not suitable for low-risk investors. Investors should expect above-average volatility with FCX. Don't buy FCX if your portfolio already contains a mining/mineral component. Investors with an investment horizon longer than two years should be rewarded from FCX's shares. Sell / Stop Loss if you were to buy shares in this company: $68.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

Freeport is a top-tier miner originally appeared on BloggingStocks on Thu, 03 Apr 2008 14:06:00 EST. Please see our terms for use of feeds.

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Freeport: A promising play for the patient investor

Joseph Lazzaro — Mon, 09 Apr 2007 14:30:00 EST

Filed under: International Markets, Freep't McMoRan Copper (FCX), Commodities

If your investment plan is long-term oriented and you can tolerate a moderate risk growth stock, copper/gold mining company Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) may fit the bill. Freeport's stock recently experienced choppiness on a projected slowdown in the global economy. The Reuters first-quarter consensus estimate for FCX calls for revenue of $2.91 billion and EPS of $2.04.

Freeport, whose $26 billion merger with Phelps Dodge in a month ago created the second largest copper company after Chile's Codelco, needs emerging market growth to fully-execute its business model. In that sense, FCX is "levered" to the global economy, in Wall Street's parlance and hence, any malaise that affects emerging markets is likely to result in a downdraft for Freeport.

However, economists now expect global growth to be least 4.00-4.50% in 2007, and probably greater, (barring, of course, another, major geopolitical incident). Further, that adequate global growth should produce continued solid demand for Freeport's primary commodities: copper and gold.

In particular, copper demand is expected to remain robust due to its use in office/home plumbing and electrical wiring. Asia demand is expected to remain strong. Gold is also seeing solid demand from both direct and jewelry applications.

Investment Category: Freeport McMoRan is a moderate-risk growth stock not suitable for low-risk investors. A mining company, FCX's fortunes rise and fall with demand for copper and gold. However, FCX is one of only a handful of miners with a global footprint, a business model that bodes well for patient, long-term investors.

Freeport: A promising play for the patient investor originally appeared on BloggingStocks on Mon, 09 Apr 2007 14:30:00 EST. Please see our terms for use of feeds.

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Freeport & Phelps Dodge: Deal Or No Deal?

Joseph Lazzaro — Mon, 11 Dec 2006 15:35:00 EST

Filed under: International Markets, SEC Filings, Deals, China, Phelps Dodge (PD)

The plot thickens regarding Freeport-McMoRan's (NYSE: FCX) potential takeover of Phelps Dodge Corp. (NYSE: PD).

Hedge fund SAC Capital, which owns a 5% stake in miner Phelps Dodge, indicated in an SEC filing Monday it wants to block Freeport McMoRan's $26.4 billion offer to buy PD, saying the price is too low. The offer, about $88 in cash and 0.67 shares of FCX stock for each PD stock, amounts to about $129 per share based on Monday's share prices. The deal would create the world's largest publicly-traded copper company. In Monday afternoon trading shares of PD dipped 70 cents to $122.97, while FCX declined 40 cents to $61.35.

Other deal watchers concurred, for the most part, on Monday that Freeport's offer may indeed be on the low side. These analysts cited Phelps Dodge's top 5 miner status, the strong demand for copper, particularly in China and in emerging markets (copper is used in pipes and wires, among other applications), and the overall health of the global economy.

Thus far, there have been no confirmed counter offers for PD, but The New York Post reported that SAC Capital was seeking a $150-per-share price for its PD shares; a spokesperson for SAC would not comment beyond the hedge fund's filing.

Investment Analysis: The best way for the typical investor to play PD? Stand aside, for now. Potential mergers/acquisition are fraught with numerous risks and potential pitfalls. The prudent course is to wait until potential deal details finalize, and if/when they do, evaluate the new FCX as an investment at that time.

Freeport & Phelps Dodge: Deal Or No Deal? originally appeared on BloggingStocks on Mon, 11 Dec 2006 15:35:00 EST. Please see our terms for use of feeds.

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Hedge fund moves in on the Phelps Dodge buyout

Tom Taulli — Mon, 11 Dec 2006 10:49:00 EST

Filed under: Deals, Rumors, Freep't McMoRan Copper (FCX)

A month ago, Freeport-McMoRan (NYSE:FCX) agreed to buyout Phelps Dodge (NYSE:PD) for $25.9 billion. The deal would result in the world's largest publicly trader copper producer.

However, a mega hedge fund, SAC Capital, is not happy with the deal and is doing something about it. Today we learn that the fund has bought about 5.1% of Phelps Dodge.

Because of this large purchase, SAC had to file a disclosure document with the SEC (known as a 13D). In it, the fund gives reasons for the purchase:

The Reporting Persons believe that the terms of the proposed FCX transaction would not provide full and fair value to the Issuer's shareholders and would deprive them of their ability to maximize the return on their investment. The Reporting Persons believe that the proposed FCX transaction offers few, if any, synergies to the combined operation, and would use the Issuer's balance sheet to fund the purchase in what is essentially a public recapitalization that would create disproportionate value for FCX shareholders at the expense of the Issuer's shareholders. In addition, the Reporting Persons believe there is unrecognized long term value that the Issuer's shareholders would forego if they sold their shares at FCX's proposed terms. Accordingly, the Reporting Persons currently intend to vote against the proposed FCX transaction.

SAC has a great track record, and no doubt sees Phelps Dodge as undervalued. With some pressure, Freeport-McMoRan may boost the price tag. Or another bidder may come to the table.

This perhaps points to a new trend: hedge funds may start using more activist approaches with their investments. With the surge in M&A activity, there is a lot of opportunity for this.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates DealProfiles.com.

Hedge fund moves in on the Phelps Dodge buyout originally appeared on BloggingStocks on Mon, 11 Dec 2006 10:49:00 EST. Please see our terms for use of feeds.

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Barron's: More bids for Phelps Dodge?

Tom Taulli — Sun, 26 Nov 2006 18:38:00 EST

Filed under: Deals, Rumors, Private Equity, Phelps Dodge (PD), BHP Billiton Ltd ADR (BHP)

This week Barron's has a piece with an enticing title: " A Buyout Boom Lifts Selected Shares."

Well, the article takes an indepth look at Freeport-McMoRan's $26 billion buyout bid for Phelps Dodge (I wrote about this deal in a recent piece for BloggingStocks.com).

So, might there be a bidding war for Phelps? True, there are synergies with Freeport; however, there are likely better suitors. Some of the possibilities include: BHP Billiton, Anglo-American, and Norilsk Nickel. In fact, there may even be interest from mega private equity firms (which seem to have no limits)

A big concern, though, is the nature of the copper market. With problems in the US real estate, might there be trouble?

Maybe. But, there is still much growth potential from China and India.

Besides, Phelps still looks cheap (despite all the buyout action). Based on its enterprise value, the company is selling at about 6X earnings.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.

Barron's: More bids for Phelps Dodge? originally appeared on BloggingStocks on Sun, 26 Nov 2006 18:38:00 EST. Please see our terms for use of feeds.

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Phelps Dodge hits a $25.9 billion mother lode

Tom Taulli — Mon, 20 Nov 2006 10:21:00 EST

Filed under: Deals, Phelps Dodge (PD)

Even though it's a smaller company, Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) has made a $25.9 billion bid for Phelps Dodge Corp. (NYSE:PD). If the deal closes, the new entity will be the largest publicly-traded copper company worldwide.

It's certainly a nice deal for shareholders of Phelps Dodge. The offer is for about $126 per share -- a nice premium to Friday's close of $95.02.

Interestingly enough, it appears this was a fairly quick deal (about a couple weeks). Then again, for companies of this size, it is not easy to keep things confidential.

The deal means Freeport-McMoRan would be taking on a lot of debt. Then again, the debt markets are quite frothy right now. Besides, Freeport-McMoRan knows how to generate strong cash flows, which will help to pay-down the debt load.

Besides being accretive on the short-run, the long-term prospects of this deal look good as well. After all, China and India are undergoing major growth, which should mean a big need for copper. To fulfill this growing need for copper, Freeport-McMoRan needs a highly scalable global platform. And Phelps Dodge is certainly a great fit.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.

Phelps Dodge hits a $25.9 billion mother lode originally appeared on BloggingStocks on Mon, 20 Nov 2006 10:21:00 EST. Please see our terms for use of feeds.

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