Getting Out of Dodge: Fool by Numbers

On Jan. 29, pan-American copper miner Phelps Dodge (NYSE: PD  ) released fourth-quarter earnings for the 2006 fiscal year, a period ended Dec. 31.

• Times are good for the big miners; Phelps Dodge's mainstay metal is copper, which may have peaked last May, but is still about as expensive on the open market as ever, and the secondary molybdenum sales have seen prices rise fivefold in five years. Hence the huge profit increases, as the company gets paid more for doing the same work.
• This company won't be around much longer, though. Freeport McMoRan Copper & Gold (NYSE: FCX  ) is buying it up for $26 billion in cash and stock.
• The post-merger company will be among the largest copper producers in the world, which is important when negotiating contracts and securing new equipment and property assets.

(Figures in millions, except per-share data)

Income Statement Highlights

	Q4 2006	Q4 2005	Change
Sales	$3,235.3	$2,255.6	43.4%
Net Profit	$1,324.3	$121.3	991.8%
EPS	$6.50	$0.60	983.3%
Diluted Shares	203.7	203.2	0.2%

Get back to basics with a look at the income statement.

Margin Checkup

	Q4 2006	Q4 2005	Change*
Gross Margin	49.4%	33.0%	16.5
Operating Margin	41.9%	22.3%	19.6
Net Margin	40.9%	5.4%	35.6

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Management Effectiveness

	Q4 2006	Q4 2005	Change*
Return on Assets	37.7%	4.7%	33.0
Return on Equity	74.7%	8.5%	66.3

*Expressed in percentage points.

See how management puts its financial tools to work.

Balance Sheet Highlights

Assets	Q4 2006	Q4 2005	Change
Cash + ST Invest.	$4,947.4	$1,916.7	158.1%
Accounts Rec.	$1,264.8	$1,028.0	23.0%
Inventory	$356.0	$329.5	8.0%

Liabilities	Q4 2006	Q4 2005	Change
Accounts Payable	$2,705.8	$1,445.7	87.2%
Long-Term Debt	$770.1	$677.7	13.6%

Learn the ways of the balance sheet.

2006 Cash Flow Highlights

	FY 2006	FY 2005	Change
Cash From Operations	$5,079.2	$1,769.7	187.0%
Capital Expenditures	$1,220.4	$685.4	78.1%
Free Cash Flow	$3,858.8	$1,084.3	255.9%

Find out why Fools always follow the money.

Related Companies:

• Southern Copper (NYSE: PCU  )
• Mitsui (Nasdaq: MITSY  )
• BHP Billiton (NYSE: BHP  )
• Bayer AG (NYSE: BAY  )
• Anglo American (Nasdaq: AAUK  )

Related Foolishness:

• A Coming Copper Combo
• The Dividend Dilemma
• Play MITSY for Me
• 6 Foreign Values With Star Power

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Anders Bylund had no position in any company mentioned. Fool rules are here.