Freeport-McMoRan, the world's largest publicly traded copper producer, posted a lower-than-expected quarterly profit on Thursday due to slipping production and prices for the red metal.
The results come as the company spends more than $15-billion to expand Indonesia's Grasberg copper and gold mine from an openpit to an underground operation, a complex and time-intensive process.
Shares of the company fell 1.4% to $13.39 in premarket trading. The stock has gained about 35% since January, outpacing copper prices.
Freeport CE Richard Adkerson said in an interview earlier this month that the Grasberg expansion will be the company's main focus for the next two years and that Freeport will forgo any dividend raises or large-scale acquisitions in the interim.
The expansion will, Adkerson hopes, mark a pivot to massive growth for the company just as copper demand surges for use in electric cars and other electronics.
"We are optimistic about the future that our asset base and copper market fundamentals are expected to provide shareholders," Adkerson said in a statement.
The Phoenix-based company posted first quarter net income of $31-million, or 2c a share, compared to net income of $692-million, or 48c a share, in the year-ago quarter.
Excluding one-time items, Freeport earned 5c a share. By that measure, analysts expected earnings of 7c a share, according to IBES data from Refinitiv.
Copper production fell 18% in the quarter to 750-million pounds, with the largest drop in Indonesia. The price Freeport receives for its copper fell 7% to $2.90/lb.
Output of gold and molybdenum also slipped during the quarter. Grasberg is also a major gold producer.
Freeport agreed last December to relinquish majority control of Grasberg under pressure from the Indonesian government, although it will remain the project's operator.
Freeport's production is expected to rise about 20% through the end of 2022 as the Grasberg expansion and other projects in the United States and elsewhere come online, according to Jefferies, a US investment bank.