Summary: On October 26, foreign media reported that Freeport-McMoRan's copper production in the Americas fell short of expectations in the third quarter, intensifying concerns about tight global supply.
Foreign media reported on October 26 that Freeport-McMoRan's copper production in the Americas fell short of expectations in the third quarter, heightening worries about global supply tightness.
In a statement, Freeport said the world's largest publicly listed copper miner produced 987 million pounds of copper in the third quarter, below the average analyst estimate of 1 billion pounds. The shortfall was attributed to lower-than-expected output from its South American and North American mines.
Despite the decline in production, third-quarter profit beat analyst expectations and was well above the same period last year, as higher copper prices helped boost revenue and earnings.
The Phoenix, Arizona-based miner expects to sell approximately 3.8 billion pounds of copper this year. Sales from July to September totaled 1.03 billion pounds.
The company's Chief Executive Officer Richard Adkerson said the copper market outlook is very optimistic.
With higher copper prices and increased production, the company is expected to achieve record earnings this year and next, allowing it to reduce debt and increase shareholder returns and investment. Adjusted earnings per share were 89 cents, above the average analyst estimate of 82 cents.
On October 15, available copper inventory on the London Metal Exchange (LME) fell to its lowest level since 1974, drawing particular attention to output from major copper mines. The market is counting on higher production from Freeport's underground copper mine in Indonesia. Freeport said underground development at its flagship Grasberg mine in Indonesia continues to progress as planned.
Freeport's third-quarter net cash cost for copper was $1.24 per pound, below the average analyst estimate of $1.30 per pound.