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Freeport to Redeem Two Series of Senior Notes Worth $617M


Freeport-McMoRan Inc. FCX announced that it had issued notices to redeem $617 million total principal amount of Freeport and Freeport-McMoRan Oil & Gas LLC senior notes on Dec 11.

The move will lead to cash interest cost-savings of roughly $40 million per annum. The company expects its net earnings to gain roughly $15 million in the fourth-quarter 2017 through these redemptions.

As of Sep 30, Freeport had total debt and consolidated cash of $14.8 billion and $5 billion, respectively. Following these redemptions and the Nov 14 repayment at maturity of the company’s 2.30% senior notes, Freeport’s total debt would be roughly $13.4 billion.

Freeport’s shares have moved up 26.1% in the last six months, outperforming the industry’s 23.7% growth.

Freeport reported net income (attributable to common stock) of 19 cents per share for third-quarter 2017, compared with 16 cents recorded a year ago. Barring one-time items, adjusted earnings were 34 cents a share in the third quarter, beating the Zacks Consensus Estimate of 29 cents.

Revenues went up around 11.2% year over year to $4,310 million in the reported quarter, surpassing the Zacks Consensus Estimate of $4,104.1 million.

For 2017, Freeport expects operating cash flow and capital expenditures to be around $4.3 billion and $1.5 billion, respectively.

Freeport anticipates sales volumes for 2017 to be roughly 3.7 billion pounds of copper, 1.6 million ounces of gold and 94 million pounds of molybdenum, including 1 billion pounds of copper, 625,000 ounces of gold and 23 million pounds of molybdenum for fourth-quarter 2017.

Freeport-McMoran, Inc. Price and Consensus

Freeport-McMoran, Inc. Price and Consensus | Freeport-McMoran, Inc. Quote

Zacks Rank & Other Stocks to Consider

Freeport currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are Sociedad Quimica y Minera S.A. SQM, FMC Corporation FMC and Westlake Chemical Corporation WLK. All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Sociedad Quimica has an expected long-term earnings growth rate of 32.5%.

FMC has an expected long-term earnings growth rate of 11.3%.

Westlake Chemical has an expected long-term earnings growth rate of 8.4%.

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