DOW JONES NEWSWIRES
Freeport-McMoRan Copper & Gold Inc.'s (FCX) second-quarter
profit fell 37% as the prices for copper and molybdenum slumped,
but the copper-mining company reported better-than-expected results
on improved production.
Shares were up 2.4% to $58.36 in premarket trading. The stock
has more than doubled this year, after slumping in the second half
of 2008.
The company has posted weak data recently as slumping revenue
over the past three quarters has been hurt by lower prices. While
copper prices have rebounded recently as the dollar weakens and
gains in worldwide equity markets suggest a more upbeat for
economic growth, particularly in China, the U.S. housing market has
shown little signs of improvement.
Freeport posted earnings of $812 million, or $1.38 a share, down
from $1.28 billion, or $2.25 a share, a year earlier. Revenue
dropped 32% to $3.68 billion on the price declines.
Analysts polled by Thomson Reuters expected per-share earnings
of 69 cents on revenue of $3.38 billion.
Operating margins rose to 40.9% from 37.7%.
In the quarter, copper production rose 13%, while gold output
more than tripled. Production of molybdenum, which is used in the
making of steel, decreased 28%. The average realized prices fell
42% for copper and slumped 68% for molybdenum but rose 2.2% for
gold.
Freeport reiterated its copper-sales view and slightly raised
its full-year estimates for gold and molybdenum to 2.4 million
ounces and 56 million pounds respectively. The old estimates were
2.3 million and 50 million. For the third quarter, Freeport expects
910 million pounds of copper, 550,000 ounces of gold and 15 million
pounds of molybdenum.
Freeport also said it will redeem all of its outstanding senior
notes due 2014 next month for $352 million. The company, which
expects to record a charge of about $14 million related to the
redemption, said $340 million of the principal amount of the notes
is currently outstanding.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com