Dividend.com: Freeport Feels Pinch

Freeport-McMoRan Earnings Fall, Expansion Plans Put on Hold

Freeport-McMoRan Copper & Gold ( FCX) just reported its third-quarter net earnings fell to $523 million, or $1.31 per share, compared with $775 million, or $1.87 per share, a year earlier.

The company said it would delay planned mine expansions because of weaker metals prices and current economic conditions.

The company's revenue for the quarter fell to $4.62 billion from $5.07 billion. Freeport did reiterate its forecast of full-year 2008 sales of 4 billion pounds of copper and 1.2 million ounces of gold, which is in line with its lowered estimate from last month.

We had removed the company's shares from our "Recommended" list on Sept. 2, when shares were at the $89.32 level. The company now has an attractive 5.45% dividend yield, based on last night's closing stock price of $36.72. We think the stock may be quite an attractive target if commodities can stabilize at their current levels. We'll be watching the shares closely, and keep investors posted.

Freeport McMoRan is not recommended at this time, holding a Dividend.com Rating of 3.2 out of 5 stars.

Caterpillar Third-Quarter Profit Slips; Cautious '09 Guidance Provided

Caterpillar ( CAT) reported its third-quarter profit slipped 6%, as higher steel and freight costs offset record global sales.

The company's revenue jumped 13% to $12.98 billion as 60% of the sales came from outside North America.

CAT is reiterating its 2008 guidance of revenue to be above $50 billion, up from $44.96 billion last year, and per-share profit of about $6, up from $5.37 per share.

For 2009, the company is hoping for pockets of strength in global mining, energy markets and emerging market infrastructure development to offset any downturns in North America, Europe and Japan.

We had removed shares of CAT from our Recommended list on July 15, when shares were trading at $67.04. The company has a dividend yield of 3.52%, based on last night's closing stock price of $40.90.

CAT shares are fairly inexpensive at 10 times 2009 estimates, but the numbers may still need to be tweaked if demand starts to fall off the proverbial cliff. We will be watching the shares closely and keep investors informed if we need to make a ratings adjustment.

Caterpillar is not recommended at this time, holding a Dividend.com Rating of 3.3 out of 5 stars.

DuPont Sees Third-Quarter Demand Drop, Earnings to Follow Suit

In its latest earnings report, DuPont ( DD) indicated that the hurricane season led to a 30% drop in third-quarter earnings.

Higher selling prices and the positive effects of a weaker dollar drove sales up 9% to $7.3 billion. The company's agriculture and nutrition products led the company's performance, with sales increasing 22% and volume up 5%.

The continued hurricane-related business interruption impacts will cause a hit of about 10 cents per share moving forward. The company is revising guidance lower to a range of $3.25 to $3.30 per share, below its previous range of $3.45 to $3.55 per share, on expected weakening demand in North American and Western European markets.

We had removed shares of DuPont from our "Recommended" list on Sept. 26, when shares traded at the $42.61 level. The company has an attractive dividend yield of 4.53%, based on last night's closing stock price of $36.17. We would continue to be cautious with the chemical producers, however, as demand becomes a breaking point for profits. We'll be watching the sector closely and will keep investors posted on any developments we find important.

DuPont is not recommended at this time, holding a Dividend.com Rating of 3.3 out of 5 stars.

Lockheed Martin Raises Gudiance, but Pension Issues Arise

Lockheed Martin ( LMT) just reported its net income rose 2% to $782 million.

The company's sales dropped 5% to $10.6 billion from year-ago levels. Part of the company's results were helped by a one-time gain and higher profit margins that offset lower sales of fighter jets.

Management revealed that its employee pension plan had declined about 25% in the last 45 days, which may mean the company would have to make up the shortfall with a potential $100 million contribution next year.

The company raised its guidance to a new range of $7.55 to $7.70 a share, up from a prior range of $7.45 to $7.60 a share. That figure was still slightly below analyst expectations of $7.74 a share.

We had removed shares of LMT from our "Recommended" list on Oct. 7, when shares were trading at $102.62. The stock is not pricey at current levels, with a valuation of 12 times estimates. It is quite possible that shares could linger until at least after the election to see what the new administration has in store for military spending. The previously mentioned pension issue is also a bit of a concern for the company.

Lockheed Martin has a dividend yield of 2.45%, based on last night's closing stock price of $93.22. Investors may want to take a breather in this name and wait for a better entry point. We'll be watching the shares closely and keep everyone posted.

Lockheed Martin is not recommended at this time, holding a Dividend.com Rating of 3.3 out of 5 stars.

At the time of publication, the author had no positions in stocks mentioned, although positions may change at any time.

Tom Reese and Paul Rubillo are senior editors of Dividend.com. Visit Dividend.com for more dividend stock ratings, picks, news, and analysis for long-term and income-seeking investors.

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