Freeport-McMoRan Copper & Gold Inc.'s (FCX) first-quarter
profit jumped a better-than-expected 59% as higher production and
surging prices boosted the top line.
Shares were up 4.4% to $54 premarket Wednesday. The stock has
climbed 58% through Tuesday's close.
Freeport's earnings have risen of late as appetite for gold, the
company's main source of revenue, remains at record levels, held up
by investors stockpiling the precious metal as a hedge against
other assets.
Freeport has also benefited from the recent rally in copper
prices, which remain historically high despite worries about
Japan's nuclear crisis and fears that high oil prices will damp the
global economic recovery. Freeport is the world's second-largest
copper producer after Chile's state-owned Corporacion Nacional del
Cobre de Chile.
Surging earnings prompted the company to declare a 50-cent
per-share special dividend on top of its normal quarterly payments.
The one-time dividend will cost the company about $470 million.
That comes on top of a $1-a-share special dividend last year and a
two-for-one stock split. Shares have more than quintupled since
December 2008.
Freeport posted a profit of $1.5 billion, or $1.57 a share, up
from $945 million, or $1 a share, a year earlier, adjusted for the
stock split. Revenue rose 31% to $5.71 billion. Analysts polled by
Thomson Reuters had forecast a $1.26 profit on $5.3 billion in
revenue.
Copper output grew 2.3% while gold production rose 3.8%.
Molybdenum output increased about 18%.
Realized prices for gold and copper both rose 26%, while
molybdenum prices increased 20%.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com