Thursday July 26 11:39 AM ET
Low Copper Prices Hurt Phelps Dodge
dailynews.yahoo.com
By David Howard Sinkman
NEW YORK (Reuters) - Phelps Dodge Corp. (NYSE:PD - news), the world's second-largest copper producer, on Thursday posted a second-quarter net loss, reversing a year-ago profit, on lower copper prices and changes in its tax provisions.
The Phoenix company, which trails only Chile's Codleco in world copper production, said it lost $103 million, or $1.31 a share, excluding charges, against year-earlier earnings of $4.5 million, or 6 cents a share.
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High energy costs have taken a bite out of the mining sector's bottom line this year. Phelps alerted over 2,350 workers in Jan. 25 over possible layoffs because of high energy costs and concerns over power availability, extending the warning this spring.
But on Thursday, Phelps said it would not extend the required notification to 1,065 workers in its Arizona operations because of some relief in power costs and availability. Company spokeswoman Susan Suver cautioned, however, that sagging copper prices remained a concern, and Thursday's announcement ``doesn't necessarily mean we won't lay off jobs.''
Phelps said second-quarter production slipped on the curtailment of part of its Chino operations in New Mexico and operational changes at its Morenci operations in Arizona. Copper production fell to 293,800 tons of copper in the quarter, down from 302,500 tons a year earlier.
Chief Executive J. Steven Whisler said softness in copper prices will continue to cut into earnings this year, but said the company is bullish on prices in 2002 and 2003. Copper prices averaged 75 cents a pound in the quarter on the COMEX, down from an average of 80 cents last year, the company said. |
