UPDATE 2-Freeport-McMoRan profit beats expectations; shares slide

Thu Jul 23, 2015 10:16am EDT
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(Recasts with bigger-than-expected adjusted profit, adds analyst's comment, year-earlier prices, capital spending plans)

By Susan Taylor

July 23 (Reuters) - Diversified U.S. miner and energy producer Freeport-McMoran Inc reported an unexpectedly strong adjusted profit on Thursday as sales of the metals and oil it produces rose, but its hefty debt load swelled and it also posted a big net loss.

The Phoenix, Arizona-based company's net loss of $1.85 billion, or $1.78 per share, resulted from writedowns on its oil and gas properties. Freeport shares were down 3 percent at $14.58 on the New York Stock Exchange after an opening gain.

Excluding one-time charges of $2 billion, Freeport's adjusted profit was 14 cents a share, well above analysts' consensus expectation of 7 cents a share, according to Thomson Reuters I/B/E/S.

"The outperformance versus our estimate was due to higher copper, gold, and oil sales than expected, combined with lower copper net cash costs, partially offset by weaker realized oil and gas prices," RBC Capital Markets analyst Fraser Phillips said in a note to clients. Phillips had expected adjusted earnings of 7 cents a share.

Debt notched higher to $20.9 billion at quarter's end from $20.3 billion at the close of March. Freeport increased its debt in 2013 as it acquired two oil and natural gas producers, seeking to diversify from copper, gold and molybdenum mining.

The company said it will continue to squeeze costs and capital spending as it tries to improve the health of its balance sheet.

Freeport maintained its full-year sales forecast of 4.2 billion pounds of copper, 1.3 million ounces of gold, and 52.3 million barrels of oil equivalent. It trimmed its molybdenum output estimate to 93 million pounds from 98 million pounds.   Continued...