UPDATE 4-Miner Freeport’s profit soars; dividend doubled

* Q1 profit $2.00/shr vs. Wall St view $1.91/shr

* Revenue $4.36 bln vs. Wall St view $4.49 bln

* Shares down as copper price drops
(Recasts; adds CEO comments, stock activity, graphics link)

By Steve James

NEW YORK, April 21 (BestGrowthStock) – Miner Freeport-McMoRan
Copper & Gold Inc (FCX.N: ) reported a twentyfold jump in
first-quarter profit (Read more your timing to make a profit.) on Wednesday and said it was doubling its
dividend as global demand for metals has soared.

But although the earnings beat Wall Street estimates, the
company’s stock fell more than 3 percent on a day when the
price of copper dropped more than 1 percent to around $3.50 per

“That’s what the stock trades on,” said analyst Charles
Bradford of Affiliated Research Group. “But the numbers are
good, and the fact they are doubling the dividend shows they
are confident with cash flow.”

While some important parts of its business remain weak,
Chief Executive Officer Richard Adkerson told analysts he was
seeing enough pockets of improving demand for Freeport to
restart southwestern U.S. and South American production it had
curtailed during the recession.

“We are taking steps to restore some of that production and
invest more aggressively in growth for the future,” he said on
a conference call.

Adkerson said China’s economy (Read more about the fastest growing economy.) was providing strong support
to the copper market: “The continuing growth in automobiles,
air conditioners and the like, the continued building of
housing for people and infrastructure indicates how strong this

But he noted there was still weakness in the developed
world — the United States, Japan and Europe — particularly in
the construction business.


Graphic on Freeport earnings http://link.reuters.com/vum78j


Adkerson said Freeport’s operating cash flow totaled $1.8
billion for the quarter and estimated it would exceed $6
billion for full-year 2010, based on average prices of $3.50
per pound for copper, $1,100 per ounce for gold and $15 per
pound for molybdenum.

As a result, the board had authorized doubling Freeport’s
annual common stock dividend to $1.20 from 60 cents.

Freeport, which operates mines in North and South America,
Africa and Indonesia, said net earnings jumped to $897 million,
or $2.00 per share, from $43 million, or 11 cents per share, a
year earlier.

Analysts on average expected $1.91 per share, according to
Thomson Reuters I/B/E/S.

Revenue surged to $4.36 billion from $2.60 billion, but
missed the analysts’ average estimate of $4.49 billion.

Adkerson said first-quarter results reflected improved
pricing as well as lower mining costs. The company’s average
realized price for copper was $3.42 per pound — double $1.72 a
year earlier. Gold was 20 percent higher, he said.

In fact, sales of copper fell to 960 million pounds from
1.0 billion a year earlier, while gold shipments declined to
478,000 ounces from 545,000. Molybdenum sales, however, rose to
17 million pounds from 10 million.

Freeport said it expected to sell 3.8 billion pounds of
copper and 1.8 million ounces of gold in 2010, the same
estimate it gave in January. But it raised its forecast for
molybdenum sales to 62 million pounds from 60 million.

The company said it expected consolidated sales in the
second half of 2010 to be higher than the first half because of
mine sequencing at the Grasberg mine in Indonesia.

In afternoon trading on the New York Stock Exchange,
Freeport stock was down 3.4 percent at $78.03.
Stock Investing

(Reporting by Steve James, editing by Dave Zimmerman and Lisa
Von Ahn)

UPDATE 4-Miner Freeport’s profit soars; dividend doubled