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Freeport profit more than doubles on Phelps purchase
Oct. 24 (Bloomberg)--Freeport-McMoRan Copper & Gold Inc, the world`s second-largest copper producer, said third-quarter profit more than doubled, boosted by rising metal prices and the acquisition of Phelps Dodge Corp.
Net income climbed to US$763 million, or US$1.87 a share, from US$351 million, or US$1.67, a year earlier, Phoenix-based Freeport said. Excluding some items, profit was US$2.52 a share, more than the US$2.24 average estimate of six analysts surveyed by Bloomberg.
Sales tripled to US$5.07 billion and copper output jumped by the same amount after the acquisition of Phelps Dodge in March.
Copper prices, up 2.9% in the quarter, have jumped more than fourfold since 2003 as demand surged from China. Freeport, led by chief executive officer Richard Adkerson, has joined other mining companies in pursuing takeovers to add reserves and boost production to take advantage of higher prices.
"They`re being showered with cash," Tom Winmill, president of Midas Management Corp, said in a telephone interview from New York on October 22.
Freeport, which owns the Grasberg operation in Indonesia, acquired 11 mines and processing plants in the Americas and a project in the Democratic Republic of Congo with the US$26 billion purchase of Phelps Dodge.
The deal made Freeport the world`s second-biggest copper producer, behind Chile`s state-owned Codelco, and the largest molybdenum miner.
Freeport rose US$4.42, or 4.1%, to US$111.15 on October 23 in New York Stock Exchange composite trading. The shares have almost doubled this year, the best performance on the 16-member Philadelphia Stock Exchange Gold & Silver Index, which is up 23%.
The company said it received US$3.53 a pound for copper, up from US$3.43 a year earlier, as sales of the metal jumped to 949 million pounds from 324 million pounds. The average realised gold price rose to US$692.43/oz from US$608.57, Freeport said.
Gold has climbed for six straight years and reached a 27-year high of US$776.90/oz on October 19. Molybdenum prices were 16% higher on average, industry data show. |
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