Freeport McMoran FCX 12/03/08 - Dividend Suspension

Freeport McMoran ( FCX ) is coming out on 12/03/08 and updating investors on their operating plans for a weaker then expected outlook as well as suspending their dividend. FCX stock is really taking a hit this morning in pre market, down 13% to $19. This is a stock that has rallied hard every time the stock market gets a bounce, sometimes as much as 25%.

FCX Analysis - The low of $17.27 must hold or you will probably see Freeport test $15, at that point I think it would be a buy for a trade. FCX will now have resistance at the $20 level...a close over $20 and i'd be bullish but would use a tight stop at this level.

Freeport-McMoRan Copper & Gold Inc. (FCX)

-- Reduction in Copper Production and Sales of 200 million pounds (5%) in 2009e and 500 million pounds (11%) in 2010e Compared with Previous Estimates

-- 18% Reduction in Estimated 2009 Unit Site Production and Delivery Costs Compared with 2008e

-- $1.2 billion Reduction (50%) in Estimated 2009 Capital Expenditures Compared with Previous Estimates

-- Suspension of Common Stock Dividend

Freeport-McMoRan Copper & Gold Inc. (FCX) announced today revised operating plans in response to the recent sharp decline in copper and molybdenum prices to incorporate reduced production levels, operating and administrative costs, exploration costs and capital expenditures.
Since completion of the Phelps Dodge acquisition in March 2007, FCX's business strategy has been focused on defining the potential of its resources and developing expansion and growth plans to deliver additional volumes to a growing marketplace. Following the more than $10 billion in debt reduction during 2007, FCX's financial policy was designed to use its cash flows to invest in growth projects with high rates of return and return excess cash flows to shareholders in the form of dividends and share purchases. In response to the dramatic recent shift in global economic conditions, FCX has revised its near-term business strategy.

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