| Freeport-McMoRan Reports 1Q15 Loss as Crude Oil Tumbles | |
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Freeport Reports 1Q15 Earnings: Key Takeaways for Investors (Part 3 of 5) (Continued from Part 2) Freeport’s 1Q results
Freeport-McMoRan (FCX) reported an adjusted loss of $0.06 per share in 1Q15. The company also incurred charges of $2.3 billion since it has written off the carrying value of its energy assets. In 2013, Freeport acquired Plains Exploration & Production Company for $16.2 billion. It was a major investment by Freeport in oil and gas production. Freeport also acquired Moran Exploration Company for $2.2 billion the same year.
Crude oil tumbles
As you can see in the above chart, crude oil prices have declined substantially since Freeport acquired these assets. Lower crude oil prices negatively impact companies engaged in oil and gas exploration. ConocoPhillips (COP), Petróleo Brasileiro (PBR), and SandRidge Energy (SD) are some of the leading energy companies. The iShares U.S. Energy ETF (IYE) tracks the American energy sector. ExxonMobil (XOP) is the largest holding of IYE, forming 21.8% of its portfolio.
Oil production down
Freeport produced 12.4 MMBOE (million barrels of oil equivalent) in 1Q15, down 22% on a year-over-year (or YoY) basis. Its realized revenues also fell 43% over this period. To add to Freeport’s woes, its unit cash production costs increased ~10% compared to 1Q14. Freeport’s revenues in 1Q15 are down 16% YoY, primarily due to lower energy sales.
Energy exploration business is capital-intensive in nature, and Freeport’s current leverage ratios don’t provide it the flexibility to borrow more. Apparently, it had to slash its dividend by 84% in a bid to control cash outflow. Freeport has also scaled back its debt reduction plan as commodity prices have corrected.
However, Freeport is looking at alternate ways to raise cash for its business. We’ll discuss some of these in the next part.
Continue to Part 4 Browse this series on Market Realist:
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Freeport McMoRan Copper and Gold Inc.
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PRODUCTEUR |
CODE : FCX |
ISIN : US35671D8570 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
Freeport McMoran est une société de production minière d'or et de cuivre basée aux Etats-Unis D'Amerique. Freeport McMoran est productrice d'or, de cuivre, d'argent, de cobalt et de molybdène au Chili, au Perou, en Indonesie et en Republique Democratique Du Congo, en développement de projets de cuivre au Perou, et détient divers projets d'exploration au Chili. Ses principaux projets en production sont CANDELARIA, EL ABRA, CHINO - MILL, HENDERSON, MIAMI - ROM LEACH, MORENCI - MILL, OJOS DEL SALADO, MORENCI et MORENCI - ROM LEACH au Chili, GRASBERG, SIERRITA et BAGDAD en Indonesie, TENKE FUNGURUME et TYRONE en Republique Democratique Du Congo et CERRO VERDE au Perou, son principal projet en développement est SAFFORD au Perou et ses principaux projets en exploration sont BAGDAD - ROM LEACH et CHINO - ROM LEACH au Perou et CERRO VERDE - MILL, CERRO VERDE - CRUSHED LEACH, CERRO VERDE - ROM LEACH, EL ABRA - ROM LEACH et CLIMAX au Chili. Freeport McMoran est cotée aux Etats-Unis D'Amerique et en Allemagne. Sa capitalisation boursière aujourd'hui est 68,1 milliards US$ (59,6 milliards €). La valeur de son action a atteint son plus bas niveau récent le 06 mars 2020 à 10,00 US$, et son plus haut niveau récent le 28 mars 2024 à 47,02 US$. Freeport McMoran possède 1 448 000 000 actions en circulation. |