Oct. 21 (Bloomberg) -- Freeport-McMoRan Copper & Gold Inc., the world's largest publicly traded copper producer, said third- quarter profit dropped 33 percent as metal prices fell.

Net income applicable to common stock slipped to $523 million, or $1.31 a share, from $775 million, or $1.87, a year earlier, Phoenix-based Freeport said today in a statement. Profit before one-time items was $1.42 a share, the company said. That trailed the $1.45 average estimate of 16 analysts surveyed by Bloomberg.

Chief Executive Officer Richard Adkerson plans to suspend some expansions as the credit crisis freezes lending and reduces the price of metals including copper, which has fallen more than 40 percent in the past year. Withdrawals from hedge and mutual funds have hammered raw materials and the shares of commodity producers.

Freeport is ``feeling the pain at some of their operations,'' Kerry Smith, a mining analyst at Haywood Securities Inc. in Toronto, said today in an interview. ``In the short term, I wouldn't expect to see closures, but if we have another three months of falling prices, there's a chance of them closing down some of their higher-cost mines.''

Freeport dropped $3.98, or 11 percent, to $32.74 at 4:15 p.m. in New York Stock Exchange composite trading. The shares fell 55 percent in the past month, the biggest decliner in the 16-member Philadelphia Stock Exchange Gold & Silver Index.

Share Buybacks Suspended

The company spent $500 million buying back its shares during the quarter at an average price of $79.15. No shares have been bought since Sept. 15 ``because of the recent financial market turmoil'' and no additional stock will be bought in the near term, Freeport said.

Overall revenue fell 8.9 percent to $4.62 billion as metal prices declined and volumes rose. Copper sales from mines in the U.S., Chile, Peru and Indonesia rose 5.4 percent to 1 billion pounds, while gold sales gained 14 percent and molybdenum climbed 19 percent.

Copper prices in New York averaged $3.42 a pound during the third quarter, 1.5 percent lower than a year earlier. The metal has since extended its decline and traded as low as $1.992 a pound today on the Comex division of the New York Mercantile Exchange, the first time the price was below $2 since December 2005.

There is ``significant uncertainty about the near-term price outlook for Freeport's principal products,'' the company said in the statement. ``We'll be responsive to current market conditions by reducing costs and capital spending and curtailing high-cost operations if required.''

Capital Spending

Freeport said it's studying whether to defer spending on a $450 million project to extend the life of its El Abra mine in northern Chile. The company owns a 51 percent stake in the mine and Chilean state-owned Codelco controls the remainder.

Profit also was cut by the ``provisional'' sales practice, in which revenue from about half of Freeport's copper output was recorded at about $2.89 a pound, the price at the end of the quarter, rather than the average price for the period, the company said.

Copper-production costs rose 23 percent to $1.29 a pound in the third quarter. Costs this year are expected to be $1.17 a pound, 6.4 percent more than forecast in July, primarily because lower volumes of ore were mined at the Freeport's Grasberg mine in Indonesia, the company said. Higher sulfuric acid and energy costs also contributed to rising costs, Freeport said.

To contact the reporter on this story: Stewart Bailey in New York at sbailey7@bloomberg.net.

Last Updated: October 21, 2008 16:44 EDT