Freeport-McMoRan (NYSE:FCX) revealed a stronger-than-expected 54.5% improvement in fourth-quarter profit, driven by higher across-the-board sales.
The Phoenix, Ariz-based company posted net income of $1.5 billion, or $3.25 a share, compared with $971 million, or $2.15 a share, in the same quarter last year. Analysts polled by Thomson Reuters had expected on average earnings of $2.88 a share.
Revenue for the world’s largest explorer and miner of mineral resources, primarily copper, gold, molybdenum, silver and cobalt deposits, was $5.6 billion, up from $4.6 billion a year ago, beating the Street’s view of $5.47 billion.
Freeport CEO James R. Moffett said the company was pleased to report record quarterly and annual financial results as well as substantial reserve additions.
“Our strong financial position and positive outlook will enable us to invest in economically attractive growth projects while providing strong cash returns to shareholders,” he said.
Earnings were fueled by stronger-than-expected sales of copper, which were 941 million pounds, higher than its October estimate of 895 million, but lower than year ago sales of 989 billion pounds. Copper sales were hit by slower North American sales, partially offset by a higher contribution from Indonesia.
Gold sales, meanwhile, climbed to 590 thousand ounces, ahead of its October estimate of 585 thousand ounces and beating 2009 sales of 551 thousand.
Freeport said it has significant reserves, with 120.5 billion pounds of copper reserves, 25.5 million ounces of gold, and 3.39 billion pounds of molybdenum as of Dec. 31. After repaying $1.6 billion in debt during the quarter, the company has $4.8 billion remaining.
Despite optimistic statements from the CEO and significantly improved results, a massive selloff ensued following the release, in which the company revealed a bleak sales outlook.
Freeport said it expects copper sales of 3.85 billion pounds for 2011, down from an anticipated 3.9 billion pounds. The company also said it would sell 1.4 million ounces of gold in 2011, down about 100,000 ounces from its earlier forecast.