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PHELPS DODGE EARNS 56 CENTS PER SHARE IN 1993 THIRD QUARTER

 PHOENIX, Ariz., Oct. 20 /PRNewswire/ -- Phelps Dodge Corporation (NYSE: PD) today reported consolidated net income of $39.7 million, or 56 cents per common share, for the third quarter of 1993, compared with $118.3 million, or $1.68 per common share, in the 1992 third quarter. The 1992 third quarter earnings included $36.4 million, or 52 cents per common share, from the sale to Sumitomo of a 20 percent interest in the La Candelaria copper-gold project in Chile. Net income in the 1993 third quarter was adversely affected by the passage of the Omnibus Budget Reconciliation Act of 1993 that retroactively raised the maximum corporate income tax rate from 34 percent to 35 percent effective January 1, 1993. The company raised its third quarter tax provision by $8.3 million, or 12 cents per common share, to reflect this rate increase that was applicable to the first nine months and to provide an additional $6.0 million for deferred taxes on temporary differences existing at December 31, 1992.
 Net income for the nine months ended September 30, 1993, was $146.3 million, or $2.07 per common share. Income in the corresponding 1992 period was $236.1 million, or $3.35 per common share, including the gain on the La Candelaria sale, but before the cumulative effect of accounting changes. In the 1992 first quarter, the company recognized a non-recurring, after-tax charge of $79.9 million, or $1.13 per common share, for the cumulative effect of postretirement and postemployment benefit and income tax accounting changes, resulting in consolidated net income of $156.2 million, or $2.22 per common share, in the first nine months of 1992.
 Douglas C. Yearley, Chairman of the Board, President and Chief Executive Officer, said: "Our 1993 third quarter earnings reflected substantially lower copper prices, offset in part by year-on-year improvement in earnings from our Phelps Dodge Industries group. We expect to maintain our competitive position through this trough in copper prices with the favorable cost structure of our copper operations and the improving earnings of our Phelps Dodge Industries group. Our third quarter earnings, which were satisfactory in light of recent copper prices, were aided by our 1993 price protection arrangements. Cash flow provided by operating activities, the principal measure of our operating performance, was $248.3 million for the first nine months of 1993, compared with $288.5 million in the corresponding 1992 period."
 As previously reported, the company has contracts with several financial institutions that provide for a minimum 1993 annual average price of 95 cents per pound for 475 million pounds of copper cathode, about 45 percent of anticipated 1993 production. These contracts are based on the average London Metal Exchange (LME) price for the entire year; therefore any benefit to be received will be determined finally at the end of 1993. During the third quarter of 1993, the company recognized revenues of $21.0 million before taxes ($13.9 million, or 20 cents per common share, after taxes) from these arrangements. This brought the total of such revenues to $28.0 million before taxes ($18.5 million, or 26 cents per common share, after taxes) for the first nine months of 1993. The amount recognized took into consideration the average LME price through the first nine months, the current LME price and possible changes during the remainder of the year. The cash flow reported for the first nine months of 1993 did not reflect any benefit from these contracts as they will not be settled until the end of the year.
 Sales were $646.7 million in the 1993 third quarter and $1,943.2 million in the first nine months of 1993, compared with $672.1 million and $1,925.9 million in the corresponding 1992 periods. The decreases in 1993 sales that resulted from lower average copper prices were partially offset by increased sales by the international wire and cable operations, principally from a late 1992 acquisition in Venezuela, and by improved sales volumes of wheels and rims. The effects of lower copper prices in 1993 also were offset by higher sales volumes of copper (including copper purchased for resale).
 During the 1993 third quarter, Phelps Dodge Mining Company recorded earnings from operations of $53.2 million, compared with $111.7 million in the third quarter of 1992. For the nine-month period ended September 30, 1993, Phelps Dodge Mining Company contributed earnings from operations of $184.3 million, compared with $269.2 million in the 1992 nine-month period. These decreases in both the third quarter and first nine months of 1993 resulted from lower average copper prices. The New York Commodity Exchange spot price per pound of copper cathode averaged 84 cents in the third quarter and 88 cents in the first nine months of 1993, compared with $1.11 and $1.04 in the corresponding 1992 periods.
 Phelps Dodge Mining Company reported sales of $340.9 million in the 1993 third quarter, and $1,002.5 million in the 1993 nine-month period. Sales were $376.1 million and $1,039.2 million in the corresponding 1992 periods.
 The Phelps Dodge Mining Company share of mine production from its worldwide operations was 135,200 tons of copper in the third quarter and 404,300 tons in the first nine months of 1993, compared with 141,200 tons and 397,400 tons in the corresponding 1992 periods. Phelps Dodge Mining Company copper sales from mine production were 139,800 tons in the 1993 third quarter and 410,600 tons in the first nine months, compared with 133,000 tons and 388,300 tons in the corresponding 1992 periods.
 Phelps Dodge Industries recorded earnings from operations of $28.1 million in the 1993 third quarter and $85.2 million in the first nine months of 1993, compared with $18.2 million and $61.5 million in the corresponding 1992 periods. Higher 1993 earnings for the third quarter and first nine months reflected improved results in the wheel and rim, wire and cable, and carbon black businesses primarily due to improved business conditions in the United States.
 Phelps Dodge Industries reported sales of $305.8 million in the third quarter and $940.7 million in the first nine months of 1993. Sales were $296.0 million and $886.7 million in the corresponding 1992 periods.
 The company's total debt at September 30, 1993, was $631.5 million, compared with $488.5 million at year-end 1992. This $143.0 million increase principally resulted from limited recourse project financing for the company's La Candelaria project in Chile and its new carbon black project in Hungary. The company's ratio of debt to total capitalization was 23.3 percent at September 30, 1993, compared with 19.4 percent at December 31, 1992.
 Capital outlays during the first nine months of 1993 were $200.6 million for Phelps Dodge Mining Company (including $134.8 million for La Candelaria), and $62.6 million for Phelps Dodge Industries. Capital outlays in the corresponding 1992 period were $145.2 million for Phelps Dodge Mining Company (including $30.5 million for La Candelaria), and $47.7 million for Phelps Dodge Industries.
 On September 8, 1993, the company paid a regular quarterly dividend of 41.25 cents per share on its common shares for the 1993 third quarter; the total amount paid was $29.0 million.
 During the first nine months of 1993 the company purchased 130,000 of its common shares under the buy-back program authorized in September 1989. Under this program, 1,627,000 shares remain authorized for purchase. There were 70,322,900 common shares outstanding on September 30, 1993.
 Phelps Dodge Corporation is the world's second largest producer of copper. The company is also one of the world's largest producers of carbon black, 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 24 other countries.
 PHELPS DODGE CORPORATION
 STATEMENT OF CONSOLIDATED OPERATIONS
 (Unaudited; in millions except per share data)
 Third Quarter
 1993 1992
 Sales and other operating revenues 646.7 672.1
 Operating costs and expenses
 Cost of products sold 486.4 467.8
 Depreciation, depletion and amortization 46.9 42.2
 Selling and general administrative expense 22.7 26.7
 Exploration and research expense 16.2 14.6
 572.2 551.3
 Operating income 74.5 120.8
 Equity earnings (losses) 0.1 1.5
 Earnings from operations 74.6 122.3
 Interest expense less amount capitalized (9.0) (9.7)
 Gain from subsidiary's stock issuance - 36.4
 Other miscellaneous income and expense, net 6.1 3.3
 Income before taxes and cumulative effect
 of accounting changes 71.7 152.3
 Provision for taxes (32.0) (34.0)
 Income before cumulative effect of accounting
 changes 39.7 118.3
 Cumulative effect of accounting changes - -
 Net income 39.7 118.3
 Earnings per share
 Income before cumulative effect of accounting
 changes 0.56 1.68
 Cumulative effect of accounting changes - -
 Net income 0.56 1.68
 Average number of shares outstanding 70.6 70.5
 BUSINESS SEGMENTS
 (Unaudited; in millions)
 Sales and other operating revenues
 Phelps Dodge Mining Company 340.9 376.1
 Phelps Dodge Industries 305.8 296.0
 646.7 672.1
 Earnings from operations
 Phelps Dodge Mining Company 53.2 111.7
 Phelps Dodge Industries 28.1 18.2
 Corporate and other (6.7) (7.6)
 74.6 122.3
 Note: 1992 financial information has been revised to recognize accounting changes for postretirement and postemployment benefits and income taxes.
 PHELPS DODGE CORPORATION
 STATEMENT OF CONSOLIDATED OPERATIONS
 (Unaudited; in millions except per share data)
 First Nine Months
 1993 1992
 Sales and other operating revenues 1,943.2 1,925.9
 Operating costs and expenses
 Cost of products sold 1,436.7 1,387.2
 Depreciation, depletion and amortization 139.9 120.8
 Selling and general administrative expense 77.6 77.6
 Exploration and research expense 40.4 36.1
 1,694.6 1,621.7
 Operating income 248.6 304.2
 Equity earnings (losses) (1.9) 4.0
 Earnings from operations 246.7 308.2
 Interest expense less amount capitalized (28.2) (29.3)
 Gain from subsidiary's stock issuance - 36.4
 Other miscellaneous income and expense, net 12.3 9.2
 Income before taxes and cumulative effect
 of accounting changes 230.8 324.5
 Provision for taxes (84.5) (88.4)
 Income before cumulative effect of accounting
 changes 146.3 236.1
 Cumulative effect of accounting changes - (79.9)
 Net income 146.3 156.2
 Earnings per share
 Income before cumulative effect of accounting
 changes 2.07 3.35
 Cumulative effect of accounting changes - (1.13)
 Net income 2.07 2.22
 Average number of shares outstanding 70.6 70.5
 BUSINESS SEGMENTS
 (Unaudited; in millions)
 Sales and other operating revenues
 Phelps Dodge Mining Company 1,002.5 1,039.2
 Phelps Dodge Industries 940.7 886.7
 1,943.2 1,925.9
 Earnings from operations
 Phelps Dodge Mining Company 184.3 269.2
 Phelps Dodge Industries 85.2 61.5
 Corporate and other (22.8) (22.5)
 246.7 308.2
 Note: 1992 financial information has been revised to recognize accounting changes for postretirement and postemployment benefits and income taxes.
 PHELPS DODGE CORPORATION
 CONSOLIDATED BALANCE SHEET
 (In millions)
 Sept. 30, Dec. 31,
 1993 1992
 (unaudited)
 Assets
 Cash and short-term investments, at cost 252.1 251.2
 Receivables, net 383.2 365.4
 Inventories 232.1 223.9
 Supplies 104.0 101.5
 Prepaid expenses 25.6 15.4
 Deferred income taxes 33.4 32.6
 Current assets 1,030.4 990.0
 Investments and long-term receivables 106.6 93.8
 Property, plant and equipment, net 2,266.6 2,108.6
 Other assets and deferred charges 277.4 248.8
 3,681.0 3,441.2
 Liabilities
 Short-term debt 88.0 72.5
 Current portion of long-term debt 25.9 42.2
 Accounts payable and accrued expenses 419.0 391.7
 Income taxes 27.7 34.5
 Current Liabilities 560.6 540.9
 Long-term debt 517.6 373.8
 Deferred income taxes 285.2 265.1
 Other liabilities and deferred credits 236.1 238.2
 1,599.5 1,418.0
 Minority interest in subsidiaries 60.0 50.8
 Common shareholders' equity
 Common shares, 70.3 outstanding (1992 - 70.4) 439.5 439.8
 Capital in excess of par value 76.2 80.6
 Retained earnings 1,605.9 1,546.7
 Cumulative translation adjustments and other (100.1) (94.7)
 2,021.5 1,972.4
 3,681.0 3,441.2
 PHELPS DODGE CORPORATION
 CONSOLIDATED STATEMENT OF CASH FLOWS
 (Unaudited; in millions)
 Nine months ended
 Sept. 30,
 1993 1992
 Operating activities
 Net income 146.3 156.2
 Adjustments to reconcile net income to cash flow
 from operations:
 Depreciation, depletion and amortization 139.9 120.8
 Deferred income taxes 22.2 19.3
 Equity earnings net of dividends received 2.2 (2.9)
 Cumulative effect of accounting changes - 79.9
 Cash flow from operations 310.6 373.3
 Gain from subsidiary's stock issuance - (36.4)
 Working capital and other adjustments (62.3) (48.4)
 Net cash provided by
 operating activities 248.3 288.5
 Investing activities
 Capital outlays (263.7) (193.3)
 Proceeds from subsidiary's stock issuance - 41.9
 Capitalized interest (12.6) (5.9)
 Investment in subsidiaries (3.8) (3.5)
 Other 3.4 3.7
 Net cash used in investing activities (276.7) (157.1)
 Financing activities
 Increase in debt 279.5 181.0
 Debt issue costs (23.5) -
 Payment of debt (137.1) (174.5)
 Common dividends (87.1) (84.0)
 Purchase of common shares (5.6) -
 Other 3.1 7.6
 Net cash provided by (used in)
 financing activities 29.3 (69.9)
 Increase in cash and short-term investments 0.9 61.5
 Cash and short-term investments
 at beginning of period 251.2 182.5
 Cash and short-term investments
 at end of period 252.1 244.0
 Note: 1992 financial information has been revised to recognize accounting changes for postretirement and postemployment benefits and income taxes.
 -0- 10/20/93
 /CONTACT: Thomas M. Foster of Phelps Dodge, 602-234-8139/
 (PD)


CO: Phelps Dodge Corp. ST: Arizona IN: MNG SU: ERN

JL-LS -- SD005 -- 4396 10/20/93 08:55 EDT
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