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Freeport-McMoRan is a leading international mining company with headquarters in Phoenix, Arizona. FCX operates a portfolio of operating, expansion and growth projects in the copper industry and is the world’s largest producer of molybdenum.
Freeport-McMoRan's Q3 profit dips on union strikes, but still beats estimates
Freeport-McMoRan (NYSE:FCX) said Wednesday third quarter profit fell 11 percent as union strikes at some of its operations in Indonesia and South America diminished production results.
For the three months ending September 30, the miner, which holds copper, gold and molybdenum properties across North America, South America, Africa and Indonesia, posted net income of $1.05 billion, or $1.10 per share, down from $1.18 billion, or $1.24 per share, a year ago.
Total revenues rose one percent to $5.20 billion, from $5.15 billion in the same period last year, helped by higher metal prices.
Analysts polled by Bloomberg Businessweek had expected earnings of $1.06 per share, on $4.7 billion in sales.
During the quarter, Freeport-McMoRan produced a total of 951 million pounds of copper, nine percent less than it did a year ago, and sold 947 million pounds of copper, down 12 percent, as weak Indonesian and South American sales could not be offset by higher-than-expected North American sales.
Gold production slipped 22 percent in the quarter, to 385 million ounces, with sales shedding 18 percent to 409 million ounces, reflecting lower production at its Grasberg copper and gold property in Papua, Indonesia.
Freeport-McMoRan said an eight-day strike in July at the Grasberg operations, and the ongoing strike which began on September 15, impacted third quarter results by about 70 million pounds of copper and about 100,000 ounces of gold. The company said it has revised its operating plan there to produce and ship concentrates at modified levels, and with a reduced workforce. It is also selling concentrate from inventory, which partly mitigated the lower production levels, it added.
Total copper sales in the South America region fell 15 percent, as the union labourer's strike also hurt production.
The company's molybdenum business improved, however, during the quarter, with production rising 21 percent to 23 million pounds, and sales increasing 12 percent to 19 million pounds.
Poor production results in the gold and copper areas was offset partially by prices, as the average realized price for copper rose three percent to $3.60 per pound, while climbing 34 percent to $1,693 per ounce of gold, and two percent to $16.34 per pound of molybdenum.
The Phoenix, Arizona-based company said it expects consolidated sales across all of its mines for the full year to be about 3.8 billion pounds of copper, 1.6 million ounces of gold, and 78 million pounds of molybdenum, including 915 million pounds of copper, 305,000 ounces of gold, and 18 million pounds of molybdenum in the fourth quarter.
The company said it expects to have spent $250 million in exploration expenses by year-end, compared to $113 million in 2010.
In New York, shares of the company rose 1.87 percent, to $36.04 as of 11:07 am EDT.
