Friday, April 23, 2010

Freeport-McMoRan (NYSE:FCX) Locks in Profits

Freeport-McMoRan (NYSE: FCX) has a great quarter as expected, as the mining company, through its gold, copper and molybdenum metals carved out a nice profit of $897 million, or $2.00 a share.

Last year during the same quarter they only generated $0.11 a share.

Even with gold production dropping to 478,000 ounces and copper to 960 million pounds, a little less than last year, molybdenum surged to 17 million pounds and the price increases in all of them more than made up for production decline.

As with every significant copper mining company, Freeport enjoyed the rise of copper prices, whose realized price was $3.42 a pound, almost twice what it was last year in the same quarter.

Gold rose from $960 an ounce to $1,110 an ounce this year, and molybdenum had a solid 30 percent upward movement, reaching $15.09 a pound. Add to that the additional production of molybdenum and it had a great effect on the earnings.

With copper and gold, prices are expected to continue to rise, and the demand for steel and the use of molybdenum in connection to that sure to grow, everything is running on all cylinders for Freeport.

Gold, depending on where the price has been when the next quarterly report comes out, is probably the least sure in the short term, as there are a lot of variables and factors which could go either way for the metal, and things like Greece, inflation, safety, the euro and the U.S. dollar all connected to its performance.

So many of these factors are moving on almost a daily basis, and so gold will swing during its ultimate continuing upward climb, but mining companies, in that regard, will go up and down with it. Freeport is one of those, although they won't swing as much as the junior miners who are more susceptible to the price movements.

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