Freeport-McMoRan Copper & Gold Inc’s profits rise to $971 million

Freeport-McMoRan Copper & Gold Inc. said Thursday its fourth-quarter performance improved on higher copper prices and better market conditions in Asia, although demand remained weak in the United States.

The company drastically scaled back production last year after copper prices tumbled late in 2008. Even though fourth-quarter production fell from prior-year levels, a strong rebound in copper and gold prices launched results into the black. Strong demand from China has helped lift prices.

Although there were some positive economic signs in the United States, western Europe and Japan, questions remain about the overall recovery, Richard C. Adkerson, CEO and president, told analysts on a conference call.

“We still need to wait to see to the fundamental numbers improve in the U.S.,” Adkerson said. “Since mid-September 2008, absent government spending, there has been virtually no new commercial real estate development.”

Freeport-McMoRan’s profit rose to $971 million, or $2.15 per share, a significant turnaround from a nearly $14 billion loss in the last quarter of 2008, when copper prices plunged.

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Revenue rose to $4.61 billion from $2.07 billion.

Analysts were expecting a profit of $1.72 a share on revenue of about $4.1 billion.

Freeport-McMoRan’s shares fell more than 7 percent in afternoon trading. Brian Hicks, a fund manager at U.S. Global Investors specializing in natural resources, said investors appear more focused on the overall economic picture than the quarterly results. Stocks overall were down sharply for a second straight day, amid more signs that a robust recovery is unlikely until the employment picture improves.

The copper and molybdenum produced by Freeport-McMoRan are used in construction, automobile manufacturing and an array of consumer products. Investors often buy the gold it produces as a safe place to put money during uncertain economic times.

Freeport-McMoRan’s copper prices more than doubled in the quarter from a year earlier when demand cratered due to the global recession. Consolidated copper sales were 989 million pounds, compared with 1.2 billion in the year-ago quarter.

China’s appetite for copper grew during 2009 as government stimulus spending boosted construction and sales of cars. China accounted for more than 40 percent of the global demand for copper last year, according to a Barclays Capital research report published Wednesday.

Consolidated gold sales totaled 551,000 ounces, which was up 19 percent from the year-ago quarter while sales of molybdenum totaled 16 million pounds, an increase of 33 percent that was attributed to more sales in Asia.

For 2010, Freeport-McMoran has forecast sales of 3.8 billion pounds of copper, 1.8 million ounces of gold and 60 million pounds of molybdenum.

The company also plans to restart one mine and one mill in Arizona but is waiting for positive signs of returning demand before looking at reopening its major operations in North America.

Shares fell $6.43, or 7.7 percent, to $77.09 in afternoon trading.

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