Freeport McMoRan posted a quarterly profit on Tuesday that narrowly beat analysts’ estimates on rising production and prices for copper and gold, with executives forecasting continued growth for 2021.
Copper sales and prices have jumped in recent months as parts of the world – China especially – began to recover from the coronavirus pandemic. Copper is often seen as a bellwether for the general state of the global economy.
At the same time, unprecedented stimulus measures and low interest rates to cushion economies from the impact of the pandemic have benefited prices for gold, which is seen as a hedge against inflation.
The company said production of both metals should continue to rise in 2021, likely allowing the company to resume its dividend, which was cut last year.
“The fundamental outlook for copper today is better than it was 10 years ago,” chief executive Richard Adkerson said on a Tuesday conference call.
Excluding items, the Arizona-based miner had a profit of 39 cents per share for the fourth quarter of 2020, compared with analysts’ average estimate of 38 cents per share, according to IBES data from Refinitiv.
Production of copper in the quarter rose to 864 million pounds, while gold output climbed to 273,000 ounces.
Expenses fell 11.2% to $2.79 billion, helped by cost-savings plan unveiled last year.
In Indonesia, the company’s largest area of operations, Adkerson said the company is in talks to expand an existing smelter and contract with a third party to build a new smelter. Such a plan would amend an agreement Freeport made with Jakarta in 2018 to build a smelter.
Adkerson, 74 and CEO since 2003, said he has no plans to retire and is healthy. “There’s great things to come and I want to be here and be part of it,” he said.
Freeport, which was the best-performing mining stock during a 9-month period up until year-end 2020, was down 6.8% at $27.00 in midday trading, near a one-month low.
(With files from Reuters)