NEW YORK Analysts
forecast that Freeport-McMoRan Copper & Gold Inc.s
fourth-quarter earnings will be down slightly from the prior
quarter, although they say that the ongoing ramp-up at its
Grasberg Mine should have a positive effect.
New York-based Dahlman Rose
& Co. LLC expects Freeport to report net income of 65 cents
per share, while New York-based Morgan Stanley & Co. LLC
forecasts 67 cents and New York-based Citigroup Inc. 70
Freeport reported net income of
$824 million, or 86 cents per share, in the third quarter.
The Phoenix-based companys
fourth-quarter results likely will benefit from the ramp-up in
Indonesia, analysts say.
"Progress toward achieving the
full run rate at Grasberg in (the) fourth-quarter results is
likely to be viewed favorably," Morgan Stanley analysts wrote.
"The initial plan was to be fully ramped up by the fourth
quarter, but this was pushed to 2013 due to extensive repairs
required after the suspension of operations in 2011."
"Production has been
artificially low because of operating issues in Indonesia, but
theyre getting back to previous levels. I think
production should be pretty good," an analyst told
AMM. "It is hard to judge demand; stockpiles are still
pretty high. But China seems like it is stabilizing."
More important, however, is the
companys recent announcement that it would acquire oil
and gas producers Plains Exploration & Production Co.,
Houston, and McMoRan Exploration Co., New Orleans, for $9
amm.com, Dec. 5).
"Unless theres a major
production or cost issue, I dont think their
fourth-quarter earnings will be a major market mover. People
are much more interested in the Plains and McMoRan deal and
will be (wondering) if it will go through," the analyst
The deals, expected to close in
the second quarter, have come under intense scrutiny (
amm.com, Dec. 6).
Citigroup analysts feel that the
proposed deal will actually weigh down earnings, as "positives
in the companys core copper business are offset by the
proposed purchase of energy assets that adds $16 billion of net