By Tess Stynes
Freeport-McMoRan Copper & Gold Inc.'s (FCX) second-quarter
earnings fell 32% as lower prices for copper and gold hurt revenue
and expenses climbed.
The company in recent months completed its deals for Plains
Exploration & Production Co. and McMoRan Exploration Co.--two
oil companies with which it has close ties--in a cash-and-stock
deal initially valued at about $9 billion, along with about $11
billion in assumed debt. The deal marked a big shift for the
world's largest publicly traded copper company toward U.S. energy
exploration.
The latest period included Plains Exploration's results starting
June 1 and McMoRan Exploration beginning June 4.
The company said it is committed to pursuing more divestitures
and cost reductions to maintain a strong balance sheet amid an
uncertain economy and weak metals prices.
The moves include plans to reduce capital spending by a total of
$1.9 billion for this year and next year.
Freeport-McMoRan reported a profit of $482 million, or 49 cents
a share, down from $710 million, or 74 cents a share, a year
earlier. The latest period included 27 cents a share in
acquisition-related gains.
Revenue decreased 4.2% to $4.29 billion.
Analysts polled by Thomson Reuters most recently projected
earnings of 41 cents on revenue of $4.28 billion.
The company's total costs and expenses climbed 15%, while its
net interest expense surged to $132 million from $43 million,
reflecting additional expense associated with acquisition-related
debt.
Shares were up 1.2% at $29.49 in premarket trading. Through
Monday's close, the stock is down 15% this year.
Write to Tess Stynes at tess.stynes@dowjones.com
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