Freeport-McMoRan profit beats as higher copper prices offset Grasberg troubles
Freeport-McMoRan posted a better-than-expected third-quarter profit on Thursday, as higher copper prices offset lower production after the company suspended operations at its flagship Grasberg mine due to the death of seven workers.
The Phoenix-based miner's shares gained 3.3% to $42.10 in morning trading.
Average copper prices rose during the quarter from a year earlier, supported by signs of better demand in key consumer China. Freeport's quarterly average realized price for copper was $4.68 per pound, up about 9% from a year earlier.
The company reported an adjusted profit of 50 cents per share for the three months ended Sept. 30, compared with analysts' average estimate of 41 cents, according to data compiled by LSEG.
Freeport-McMoRan had warned of lower sales due to a nearly month-long halt in operations at its Grasberg mine in Indonesia - the world's second-largest copper mine and largest gold mine - after roughly 800 000 metric tons of mud flooded the site last month.
Heavy mudflows trapped seven workers underground, all of whom were confirmed dead by the company earlier this month.
The miner had said a phased restart and ramp-up of operations may not occur until mid-2026.
It forecast fourth-quarter copper sales at 635 million pounds and gold sales at 60 000 ounces, both lower than what it had reported a year earlier, dragged down by the suspension.
Jefferies analyst Chris LaFemina said the target is still achievable, "but the perceived risk of operating at Grasberg is likely to be a semi-permanent overhang" for the company.
Freeport's copper production stood at 912 million recoverable pounds during the third quarter, down 13.2% from a year earlier. Gold production was at 287 000 recoverable ounces, down 37.1% from a year ago.
The company did not hold an investor conference call on Thursday to discuss the results and instead plans to hold one next month after an investigation into the Grasberg accident is complete.
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