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PHELPS DODGE EARNS $2.16 PER SHARE IN 1991 FOURTH QUARTER

 PHELPS DODGE EARNS $2.16 PER SHARE IN 1991 FOURTH QUARTER
 PHOENIX, Ariz., January 28 /PRNewswire/ -- Phelps Dodge Corporation (NYSE: PD) today reported consolidated net income of $272.9 million ($7.86 per common share) for the year ended December 31, 1991, compared with earnings of $454.9 million ($13.12 per common share) for the year ended December 31, 1990. Net income for the 1991 fourth quarter was $75.2 million ($2.16 per common share), compared with $102.9 million ($2.98 per common share) for the corresponding 1990 period. Per share amounts reflect average shares outstanding on a fully diluted basis for the respective periods.
 Douglas C. Yearley, Chairman of the Board, President and Chief Executive Officer, said: "Our 1991 earnings were gratifying in light of the state of the world economy. These earnings were principally the result of a continuing solid performance by Phelps Dodge Mining Company despite a 14 cents per pound drop in the average annual copper price from last year. Phelps Dodge Industries coped well with the continuing recession in the United States, remaining securely profitable and generating good cash flow. Total company net cash provided by operating activities, the principal measure of performance in our businesses, was a healthy $481 million in 1991."
 Sales were $613.3 million in the 1991 fourth quarter and $2,434.3 million for the year, compared with $636.1 million and $2,635.7 million in the corresponding 1990 periods. These decreases resulted principally from lower average realized copper prices and reduced sales of wheels and rims and specialty wire products. Average 1991 selling prices for carbon black and magnet wire also were below corresponding 1990 levels.
 Phelps Dodge Mining Company recorded earnings from operations of $367.5 million in 1991, compared with 1990 earnings of $594.4 million. The 1991 earnings were impacted by lower average realized copper prices and higher unit production costs compared with 1990. The higher 1991 production costs resulted from low grade ore being treated at the Tyrone mine in New Mexico as it nears the end of its concentrator operations (concentrator operations are expected to end in early 1992), higher stripping ratios as mining moved into the Metcalf area of the Morenci mine in Arizona and continuing inflation. Production cost increases have been moderated by increased productivity resulting from recent capital programs. During the 1991 fourth quarter, Phelps Dodge Mining Company contributed earnings from operations of $87.3 million, compared with $130.9 million in the 1990 fourth quarter. These lower 1991 fourth quarter earnings also reflected the impact of lower average realized copper prices and higher unit production costs compared with the same period last year.
 For the year ended December 31, 1991, Phelps Dodge Mining Company reported sales of $1,325.3 million, compared with 1990 sales of $1,447.8 million. Sales in the 1991 fourth quarter were $343.9 million, compared with $352.1 million in the corresponding 1990 period. The New York Commodity Exchange spot price per pound of copper cathode averaged $1.05 in the year ended December 31, 1991, and $1.04 in the 1991 fourth quarter, compared with $1.19 and $1.18 in the corresponding 1990 periods.
 Phelps Dodge's share of mine production from its worldwide operations was 538,100 tons of copper for the year ended December 31, 1991, compared with a record 560,700 tons in 1990. Production was 134,700 tons in the 1991 fourth quarter, compared with 142,800 tons in the corresponding 1990 period. Phelps Dodge's copper sales from mine production were 553,900 tons for the year ended December 31, 1991, compared with a record 556,700 tons in 1990. Sales were 132,300 tons in the 1991 fourth quarter, compared with 127,500 tons in the 1990 fourth quarter.
 Phelps Dodge Industries recorded earnings from operations of $76.3 million for the year ended December 31, 1991, compared with 1990 earnings of $147.1 million. During the 1991 fourth quarter, Phelps Dodge Industries contributed earnings from operations of $25.6 million, compared with $36.7 million in the 1990 fourth quarter. The lower 1991 earnings reflected continued weak demand in the North American transportation industry, a major consumer of Phelps Dodge Industries' products. Fourth quarter earnings also were adversely impacted by lower selling prices for carbon black, low demand and prices for truck wheels, lower magnet wire prices and reduced demand for specialty conductors in the United States.
 Phelps Dodge Industries reported sales of $1,109.0 million and $269.4 million, respectively, for the year and quarter ended December 31, 1991; sales were $1,187.9 million and $284.0 million in the corresponding 1990 periods.
 Phelps Dodge also reported that net income in the 1991 fourth quarter included $8.8 million after taxes from a dividend on its 16.2 percent minority interest in Southern Peru Copper Corporation.
 Capital outlays for the company were $357.7 million for the year ended December 31, 1991, compared with $290.4 million in the corresponding 1990 period.
 At December 31, 1991, the company's total debt was $479.9 million, compared with $479.7 million at year-end 1990. During the year, increases in short-term borrowings outside the United States, to fund capital programs at international mining projects and wire and cable plants, were offset by payments on the company's notes, debentures and other U.S. long-term debt. The company's ratio of debt to total capitalization was 20.2 percent at December 31, 1991, compared with 21.9 percent at December 31, 1990.
 During the year ended December 31, 1991, the company purchased 30,000 of its common shares, all in the fourth quarter. The company has purchased approximately 3.4 million of its common shares under a buyback program authorized in September 1989 and a now superseded program begun in November 1988; 0.9 million shares remain authorized for purchase under the current program. There were 34.8 million common shares outstanding at December 31, 1991.
 Phelps Dodge is the world's second largest producer of copper. The company is also the world's second largest producer of carbon blacks, the leading North American fabricator of wheels and rims for medium and heavy trucks, a major manufacturer of magnet wire and specialty conductors, and has operations and investments abroad in mines and wire and cable manufacturing facilities. The company's operations are located throughout the United States and in 22 other countries.
 PHELPS DODGE CORPORATION
 STATEMENT OF CONSOLIDATED OPERATIONS
 (In millions except per share data)
 Fourth Quarter
 1991 1990
 (unaudited)
 Sales and other operating revenues 613.3 636.1
 Operating costs and expenses
 Cost of products sold 438.5 407.6
 Depreciation, depletion and amortization 34.6 33.3
 Selling and general administrative expense 24.3 24.1
 Exploration and research expense 12.4 13.8
 509.8 478.8
 Operating income 103.5 157.3
 Equity earnings 1.9 1.3
 Earnings from operations 105.4 158.6
 Interest expense less amount capitalized (11.9) (11.7)
 Miscellaneous income and expense, net 11.2 2.7
 Income before taxes 104.7 149.6
 Provision for taxes (29.5) (46.7)
 Net income 75.2 102.9
 Earnings per share 2.16 2.98
 Average number of shares outstanding 34.9 34.6
 BUSINESS SEGMENTS
 (In millions)
 Sales and other operating revenues
 Phelps Dodge Mining Company 343.9 352.1
 Phelps Dodge Industries 269.4 284.0
 613.3 636.1
 Earnings from operations
 Phelps Dodge Mining Company 87.3 130.9
 Phelps Dodge Industries 25.6 36.7
 Corporate and other (7.5) (9.0)
 105.4 158.6
 PHELPS DODGE CORPORATION
 STATEMENT OF CONSOLIDATED OPERATIONS
 (In millions except per share data)
 Year
 1991 1990
 Sales and other operating revenues 2,434.3 2,635.7
 Operating costs and expenses
 Cost of products sold 1,734.2 1,663.2
 Depreciation, depletion and amortization 138.9 133.0
 Selling and general administrative expense 98.7 93.7
 Exploration and research expense 50.6 47.4
 2,022.4 1,937.3
 Operating income 411.9 698.4
 Equity earnings 3.1 12.3
 Earnings from operations 415.0 710.7
 Interest expense less amount capitalized (39.1) (49.9)
 Miscellaneous income and expense, net 28.4 18.1
 Income before taxes 404.3 678.9
 Provision for taxes (131.4) (224.0)
 Net income 272.9 454.9
 Earnings per share 7.86 13.12
 Average number of shares outstanding 34.7 34.7
 BUSINESS SEGMENTS
 (In millions)
 Sales and other operating revenues
 Phelps Dodge Mining Company 1,325.3 1,447.8
 Phelps Dodge Industries 1,109.0 1,187.9
 2,434.3 2,635.7
 Earnings from operations
 Phelps Dodge Mining Company 367.5 594.4
 Phelps Dodge Industries 76.3 147.1
 Corporate and other (28.8) (30.8)
 415.0 710.7
 PHELPS DODGE CORPORATION
 CONSOLIDATED BALANCE SHEET
 (In millions) Dec. 31, Dec. 31,
 1991 1990
 Assets
 Cash and short-term investments, at cost 182.5 161.6
 Receivables, net 317.7 307.7
 Inventories 208.5 256.9
 Supplies 100.6 95.2
 Prepaid expenses 9.2 17.6
 Current assets 818.5 839.0
 Investments and long-term receivables 95.8 93.1
 Property, plant and equipment, net 1,894.5 1,691.2
 Other assets and deferred charges 242.4 204.1
 3,051.2 2,827.4
 Liabilities
 Current liabilities 476.8 489.7
 Long-term debt 382.0 403.5
 Deferred income taxes 157.5 110.0
 Other liabilities and deferred credits 140.4 116.3
 1,156.7 1,119.5
 Minority interest in subsidiaries 35.2 25.0
 Common shareholders' equity 1,859.3 1,682.9
 3,051.2 2,827.4
 CONSOLIDATED STATEMENT OF CASH FLOWS
 (In millions)
 Year ended December 31,
 1991 1990
 Operating activities
 Cash flow from operations 479.3 633.5
 Working capital and other adjustments 1.7 8.4
 Net cash provided by
 operating activities 481.0 641.9
 Investing activities
 Capital outlays (357.7) (290.4)
 Investment in subsidiaries (8.5) (4.4)
 Other (4.1) 1.8
 Net cash used in investing activities (370.3) (293.0)
 Financing activities
 Increase in debt 47.5 19.1
 Payment of debt (42.7) (98.2)
 Purchase of common shares (1.9) (21.8)
 Common dividends (104.0) (103.7)
 Other 11.3 4.5
 Net cash used in financing activities (89.8) (200.1)
 Increase in cash and short-term investments 20.9 148.8
 Cash and short-term investments
 at beginning of year 161.6 12.8
 Cash and short-term investments
 at end of year 182.5 161.6
 -0- 1/28/92
 /CONTACT: Thomas M. Foster of Phelps Dodge, 602-234-8139/
 (PD) CO: Phelps Dodge ST: Arizona IN: MNG SU: ERN


CH -- SD003 -- 4067 01/28/92 09:03 EST
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