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Investors shrug off Freeport-McMoRan’s doubling of profits

Freeport-McMoRan reported a doubling of profits at $1.4 billion in the second quarter, but the blow-out results did not satisfy investors who shaved more than 1.5% off the stock amid record gold prices and a positive day on the markets.

The company said labour action at its Grasberg mine – the globe’s largest copper-gold mine – hurt output. During the eight-day strike in July, the company lost about 35 million pounds of copper production and 60 thousand ounces of gold production which could hurt its next set of results.

Freeport’s revenues jumped to just over $5.8 billion from $3.9 billion in the same quarter of 2010. Sales and production were mostly up at the company’s other mines. Consolidated sales from mines for second-quarter 2011 totaled 1.0 billion pounds of copper, 356 thousand ounces of gold and 21 million pounds of molybdenum, compared with 914 million pounds of copper, 298 thousand ounces of gold and 16 million pounds of molybdenum for second-quarter 2010.

Overall production costs were slightly lower. Consolidated cash costs averaged $0.93 per pound of copper for second-quarter 2011, compared with $0.97 per pound for second-quarter 2010.

Despite the stellar results and a gold price hovering near record levels above $1,600/oz, stock in the company lost more than 1.5% in midday trade, changing hands at $55.05 on a generally positive day on New York markets.