Freeport-mcmoran's copper production in the Americas fell short of expectations in the third quarter, adding to concerns about tight global supply.
Freeport, the world's largest publicly traded copper miner, produced 987 million pounds of copper in the third quarter, below analysts' average estimate of 1 billion pounds, the company said in a statement. The lower than expected output was due to lower than expected production from its Mines in South and North America.
Despite the drop in production, third-quarter profit beat analysts' expectations and was well ahead of the same period last year as higher copper prices helped boost revenue and profits.
The Phoenix-based miner expects annual copper sales to reach about 3.8 billion pounds this year. Sales from July through September were 1.03 billion pounds.
Chief Executive Richard Akerson said the outlook for the copper market was very positive.
Thanks to higher copper prices and higher production, the company is on track to post record earnings this year and next, reducing debt and increasing shareholder returns and investment. Adjusted earnings were 89 cents a share, beating the average analyst estimate of 82 cents.
London Metal Exchange (LME) available copper stocks fell to their lowest level since 1974 on October 15, making production of major copper mines a particular focus. The market is pinning its hopes on increased output from Freeport's underground copper mine in Indonesia. Freeport said underground work at its flagship Grasberg mine in Indonesia continued as planned.
Freeport's net cash cost of copper was $1.24 a pound in the third quarter, below the average analyst estimate of $1.30 a pound.
