U.S. Markets close in 4 hrs 50 mins

Freeport to Redeem 2 Series of Senior Notes Worth $454M

Zacks Equity Research
1 / 3

BorgWarner (BWA) in Focus: Stock Moves 5% Higher

BorgWarner (BWA) saw a big move last session, as its shares jumped 5% on the day, amid huge volumes.

Freeport-McMoRan Inc. FCX issued notices to redeem $454 million total principal amount of Freeport and Freeport-McMoRan Oil & Gas LLC senior notes on Apr 4.  

The move will result in total cash interest cost savings worth $30 million per year. Freeport expects to realize a net gain of roughly $10 million in second-quarter 2018 with regards to these redemptions.

Notably, Freeport had total debt of $13.1 billion and consolidated cash of about $4.4 billion at the end of 2017. Following these redemptions and the Mar 15 repayment at maturity of the company’s 2.375% senior notes, Freeport’s total debt will come down to roughly $11.2 billion.

Freeport’s shares have gained 26.8% in the last six months, outperforming the industry’s 18% growth.



Freeport reported net income (attributable to common stock) of 71 cents per share for fourth-quarter 2017 compared with 21 cents recorded a year ago. Adjusted earnings were 51 cents a share in the quarter, which beat the Zacks Consensus Estimate of 49 cents.

Revenues went up around 15.2% year over year to $5,041 million in the quarter, surpassing the Zacks Consensus Estimate of $4,811.2 million.

Freeport remained focused on reducing debt during the quarter. The company repaid $1.7 billion of debt (including the redemption of $617 million of senior notes due 2020) during the fourth quarter.

For 2018, the company expects operating cash flows to exceed $5.8 billion (including $0.3 billion in working capital and other tax payments) and capital expenditures to be around $2.1 billion. These include $1.2 billion for major mining projects mainly related to underground development in the Grasberg and the Lone Star oxide project.

Freeport-McMoRan Inc. Price and Consensus

Freeport-McMoRan Inc. Price and Consensus | Freeport-McMoRan Inc. Quote

Zacks Rank & Stocks to Consider

Freeport currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Steel Dynamics, Inc. STLD, Westlake Chemical Corporation WLK and United States Steel Corporation X, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have soared 39.2% over the last six months.

Westlake Chemical has an expected long-term earnings growth rate of 12.2%. Its shares have moved up 48.1% over the past six months.

U.S. Steel has an expected long-term earnings growth rate of 8%. Its shares have rallied 61.7% over the last six months.

Wall Street’s Next Amazon

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

Click for details >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Westlake Chemical Corporation (WLK) : Free Stock Analysis Report
 
Freeport-McMoRan Inc. (FCX) : Free Stock Analysis Report
 
Steel Dynamics, Inc. (STLD) : Free Stock Analysis Report
 
United States Steel Corporation (X) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research