Freeport Net Income Increases on Higher Metal Prices (Update2)

April 21 (Bloomberg) -- Freeport-McMoRan Copper & Gold Inc., the world's largest publicly traded copper producer, said first-quarter profit surged as global demand boosted metal prices.

Net income increased to $897 million, or $2 a share, from $43 million, or 11 cents, a year earlier, Phoenix-based Freeport said today in a statement. Profit excluding some one-time items was $2.05 a share. Freeport was expected to earn $1.92, the average estimate of 18 analysts surveyed by Bloomberg. Sales climbed 68 percent to $4.36 billion, trailing the $4.49 billion average estimate in the survey.

Chief Executive Officer Richard Adkerson benefited from copper prices that almost doubled in the 12 months through March as Chinese demand climbed for the metal used in pipes and wires. China's economic growth accelerated to the fastest pace in almost three years in the first quarter and imports of refined copper surged 53 percent in March from February.

"Lately most of the copper sales have been going overseas to China, and not so much in the U.S, where there are problems in the construction market," Bill Selesky, a New York-based analyst at Argus Research, said today in an interview before the release. "What's driving the industry is China growth and in Asia-Pacific."

Freeport fell 77 cents to $80.03 at 9:40 a.m. in New York Stock Exchange composite trading. The shares more than doubled in the 12 months through yesterday.

Dividend Raised

Freeport said today it will double its quarterly dividend to 30 cents.

The company reiterated its 2010 copper sales forecast of about 3.8 billion pounds, down from 4.1 billion in 2009 and 4.07 billion in 2008.

"While China has likely built some inventories of copper, imports remain extremely robust and point to continuing underlying strength within the Chinese economy," Anthony Rizzuto, a New York-based analyst with Dahlman Rose & Co., said in a April 19 research note.

Copper fell in New York on concern about the outlook for demand as China, the world's largest consumer, took more steps to control economic growth. Futures for July delivery declined 1.1 cent to $3.5245 a pound on the Comex.

The company expects to sell 1.8 million ounces of gold this year. Freeport sold 2.64 million ounces of gold in 2009 and 1.31 million in 2008, the company said in January. It said today it will sell 62 million pounds of molybdenum, a steel-strengthening ingredient, this year. That compares with a January estimate of 60 million pounds.

"Our first-quarter results reflect continued strong performance at our operations around the world and improved pricing for our products -- copper, gold and molybdenum," Adkerson said in today's statement.