Freeport quarterly profit misses expectations amidst Grasberg expansion
By Ernest Scheyder
April 25 (Reuters) - Freeport-McMoRan Inc FCX.N, the world's largest publicly traded copper producer, posted a lower-than-expected quarterly profit on Thursday due to slipping production and prices for the red metal.
The results come as the company spends more than $15 billion to expand Indonesia's Grasberg copper and gold mine from an open pit to an undergroundoperation, a complex and time-intensive process.
Shares of the company fell 1.4 percent to $13.39 in premarket trading. The stock has gained about 35 percent since January, outpacing copper prices CMCUc1.
Freeport Chief Executive Richard Adkerson said in an interview earlier this month that the Grasberg expansion will be the company's main focus for the next two years and that Freeport will forgo any dividend raises or large-scale acquisitions in the interim.
The expansion will, Adkerson hopes, mark a pivot to massive growth for the company just as copper demand surges for use in electric cars and other electronics.
"We are optimistic about the future that our asset base and copper market fundamentals are expected to provide shareholders," Adkerson said in a statement.
The Phoenix-based company posted first quarter net income of $31 million, or 2 cents per share, compared to net income of $692 million, or 48 cents per share, in the year-ago quarter.
Excluding one-time items, Freeport earned 5 cents per share. By that measure, analysts expected earnings of 7 cents per share, according to IBES data from Refinitiv.
Copper production fell 18 percent in the quarter to 750 million pounds, with the largest drop in Indonesia. The price Freeport receives for its copper fell 7 percent to $2.90 per pound.
Output of gold and molybdenum also slipped during the quarter. Grasberg is also a major gold producer.
Freeport agreed last December to relinquish majority control of Grasberg under pressure from the Indonesian government, although it will remain the project's operator.
Freeport's production is expected to rise about 20 percent through the end of 2022 as the Grasberg expansion and other projects in the United States and elsewhere come online, according to Jefferies, a U.S. investment bank.
(Reporting by Ernest Scheyder Editing by Chizu Nomiyama)