Photo by: Reuters
TORONTO (miningweekly.com) – Diversified miner Freeport-McMoRan's profit fell nearly a third year-on-year for the three months ended September 30, as depressed copper and gold prices cancelled expected gains from improved sales.
NYSE-listed Freeport reported net income attributable to shareholders of $552-million, or $0.53 a share, for the three months under review, compared with $821-million, or $0.79 a share, in the same quarter last year.
Twenty-one analysts had, on average, expected the company to report earnings of $0.61 a share and revenue of $5.65-billion.
Freeport's earned revenue of $5.7-billion in the quarter, was down 8% from the $6.17-billion earned a year earlier.
The Phoenix, Arizona-based company said that despite copper sales rising 3.5% to 1 027 lb, a 5% drop in the average realised sales price wiped out gains.
Gold sales rose 72% to 525 000 oz but the average realised price fell 8% to $1 220/oz.
Molybdenum sales were down marginally at 22-million pounds; however, the commodity recorded a 31% rise in the average selling price to $14.71/lb.
Meanwhile, Freeport had, on October 13, been granted permission by authorities to resume operations at its Grasberg openpit mine, in Indonesia, after operations had been temporarily suspended following the September 27 truck accident that killed four workers at the mine.
The company reported that workforce attendance in several operating areas at the mine reflected normal levels; however, a large percentage of Grasberg openpit operators had not reported to their scheduled shifts, resulting in reduced production from the openpit during October.
Further, Freeport was, on Monday, given notice by the local union leadership that workers would embark on a 30-day strike beginning on November 6.
The company labelled the proposed action as unlawful and inconsistent with the terms of the collective labour agreement.
Freeport expected consolidated sales for 2014 of about 3.9-billion pounds of copper, 1.2-million ounces of gold, 95-million pounds of molybdenum and 56.2-million barrels of oil equivalent (MMBOE), including one-billion pounds of copper, 350 000 oz of gold, 21-million pounds of molybdenum and 11.5 MMBOE for the fourth quarter.
The company’s NYSE-listed stock dove 4.16% on Tuesday, closing at $29.03 apiece, having lost nearly 20% in value from the start of the year.