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FREEPORT - Copper miner Freeport-McMoRan beat Wall Street estimates for fourth-quarter profit on Wednesday, helped by strong production and higher prices for the red metal, sending its shares up about 6% in morning trading.
Demand for copper, which is used in nearly every electronic device as well as in construction and many other industries, remains tight due in part to strong demand in the United States and Canada, executives said.
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Prices of copper rose in the quarter despite macroeconomic concerns, including regional conflicts, thanks in part to a weaker dollar, lower inventories and China's moves to boost its struggling housing and stock markets. Executives said they expect prices to rise further still in order to incentivize further production.
"We're optimistic about future prices," Freeport CEO Richard Adkerson told investors on a conference call to discuss the results.
Freeport's quarterly copper sales gained 7.1% year-over-year to 1.1 billion recoverable pounds, while average realized price per pound rose 1.1% to $3.81.
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Its quarterly gold sales also rose, gaining 19.9% to 549,000 recoverable ounces with the average realized price per ounce up 13.7% at $2,034.
Average spot gold prices rose more than 13% in the quarter on a softer dollar and hopes that the U.S. Federal Reserve would cut interest rates, helping gold miners such as Freeport.
On an adjusted basis, the company earned 27 cents per share for the three months ended on Dec. 31, compared with analysts' average estimate of 22 cents, according to LSEG data.
The company reported revenue of $5.91 billion in the quarter, beating estimates of $5.86 billion.
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Adkerson reiterated that the company would focus more on internal growth, saying that Freeport has not found an attractive buyout possibility. The company has been investing heavily in copper leaching operations.
In Indonesia, Freeport expects to open a new copper smelter later this year that was required as part of a deal with government officials.
