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Phelps Dodge has loss
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April 13, 1999: 12:12 p.m. ET
No. 1 copper producer cites lower prices; results miss forecasts by 1 cent
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NEW YORK (CNNfn) - Stung by a 17 percent decline in copper prices, Phelps Dodge Corp. Tuesday reported a loss for the first quarter that was a penny a share higher than forecasts on Wall Street.
The nation's biggest copper producer said it earned $500,000, or 1 cent a diluted share, in the quarter excluding a one-time charge from accounting changes. But excluding a gain equal to 12 cents a share from the sale of property, it had a loss of 11 cents a share compared with forecasts for a loss of 10 cents a share, according to First Call, which tracks earnings results.
Including the $3.5 million accounting charge and the gain on the property sale, which was offset by an equal 12-cent-a-share currency exchange loss, Phelps Dodge had a net loss of $3 million, or 5 cents a share, in the quarter.
Phelps Dodge said solid results from its specialty chemical and cable and wire businesses only partly offset the weakness in copper. Sales fell 17 percent to $663 million from $798 million.
Phelps Dodge Chairman Douglas Yearley said the company would operate "near break-even" if copper prices range from 65 to 70 cents a pound but that prices would probably stay under pressure for much of 1999.
"We have too much capacity, and unless we get some voluntary curtailments, odds are we're going to have some difficulty with prices for a few quarters forward," Yearley told CNNfn.
Economic problems in Asia, Russia, parts of Europe and Latin America have depressed demand for copper, which is used in building and construction, telephones and other equipment. That weakness abroad has more than offset sold demand in the United States, Yearley said.
Copper prices fell to 64 cents a pound during the quarter from 77 cents a year earlier, the company said, noting prices were the lowest this century when adjusted for inflation. Spot copper rose about a penny to 64.6 cents a pound on the New York Mercantile Exchange Tuesday.
In the 1998 first quarter, Phoenix, Ariz.-based Phelps Dodge earned $40.8 million, or 70 cents a share, excluding a one-time gain from asset sales.
Phelps Dodge stock rose 1-5/16 to 52-1/16.
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Phelps Dodge
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