- This will be a year of adjustments amid uncertain commodity markets, but "we're not backing away from our objectives of reducing leverage, and going forward we're going to continue to prioritize debt reduction," Freeport McMoRan (FCX -5.9%) CEO Richard Adkerson says in today's earnings conference call.
- Copper's long-term fundamentals are strong, the CEO says, adding that FCX’s strength is its long-term reserves, and these will kick into high gear as prices rise, generating cash flows; FCX expects to produce 5.4B lbs. of copper in 2016, up from 4.3B lbs. this year.
- The company's expansion into energy exploration inflated FCX's debt to $19B at year-end 2014; with commodity prices at current levels, its debt target of $12B by year-end 2016 target is now unrealistic, Adkerson says.
- FCX is counting on Chinese demand for copper to grow ~5%/year while it could be only in the low single digits, Morningstar's Dan Rohr says; another risk for the company is that its two lowest cash-cost mines are in politically volatile Indonesia and the Democratic Republic of Congo.
- Citigroup's Brian Yu kept his Hold rating on the stock, saying Q4 copper results and oil and gas margins came in weaker than expectations and 2015 guidance for both was reduced.
-
Earlier: Freeport McMoRan cuts 2015 capital budget by $2B