Freeport-McMoRan (NYSE:FCX) made a big announcement Tuesday morning with plans to cut dividends by 84%. The copper and gold producer announced that volatile market conditions has caused the company to cut dividends from $0.31 per share to just $0.05 per share.
The cut will be in effect for the quarterly payout schedule for May 1.
The company states that they are going to strengthen their balance sheet. Recent earnings reports show that Freeport-McMoRan posted a loss last quarter and has already made changes to their capital spending budget to lower costs moving forward into 2015.
Copper prices are up in March. Earlier in the year, prices dipped to just $2.49 per pound and have since risen to $2.79. The price increase should help the company bolster its revenue in the next quarter.
A company spokesperson has stated that as market conditions improve, the company plans to increase its dividend payouts to shareholders.
In 2008, the company suspended dividends due to the financial crisis.
Company stock prices have dropped 42% on the year. News of the recent cut to dividend payouts has caused the company’s stock prices to fall in early Tuesday trading by 1.55% after rising sharply on Monday due to rising copper and crude oil prices.