Freeport-McMoRan Copper & Gold Inc. reported a 16-per-cent rise in fourth-quarter profit Tuesday on higher production of both metals, beating expectations, and forecast increased sales in 2013.
Higher volumes helped the company overcome lower gold and copper prices in the quarter. Freeport shares rose nearly 4 per cent in morning trading.
"No big surprises, but then we already had a really big surprise last month, so we've had our fill," analyst Daniel Rohr of Morningstar said of the quarterly results.
Freeport, the world's largest listed copper producer, said in December that it would buy Plains Exploration & Production Co. and McMoRan Exploration Co. to enter the energy business. The $9-billion (U.S.) bid to buy the two U.S. oil and gas companies has been criticized by investors as an expensive and unnecessary distraction.
Freeport is optimistic about the opportunities the pending acquisitions will provide, chairman James Moffett and chief executive officer Richard Adkerson said on Tuesday.
The move into energy comes at a time when prospects for growth in the flagship copper business are waning as mines age, ore grades decline and costs rise. There are very few premier accessible copper mines left to be acquired.
"I doubt the appetite (for further energy acquisitions) is going to be there, considering the magnitude of this one and the rather negative investor reception," Mr. Rohr said.
Fourth-quarter net income rose to $743-million, or 78 cents per share, from $640-million, or 67 cents per share, a year earlier. Revenue climbed 8 per cent to $4.51-billion.
Analysts on average were expecting 70 cents per share and revenue of $4.5-billion, according to Thomson Reuters I/B/E/S.
The company sold 972 million pounds of copper in the quarter, beating its estimate of 930 million pounds.
Higher volumes boosted the quarterly results. Copper output rose 22 per cent to about 1 billion pounds, while gold production soared 39 per cent to 251,000 ounces.
The spot gold price fell nearly 6 per cent to $1,674.34 per ounce during the quarter. Three-month copper on the London Metal Exchange fell 4 per cent to $7,931 per tonne.
Freeport said it expects to reach higher ore grades at its Grasberg mine in Indonesia in late 2013, which should result in higher copper and gold sales. It forecast 2013 sales gains of 18 per cent in copper and 37 per cent in gold.
Gold output from Grasberg was hurt for most of last year as the company worked through a layer of lower-grade ores.
Freeport shares were up 3.8 per cent to $34.94 in morning trading in New York.