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Freeport Net Beats Analyst Estimates; Dividend Raised

Oct. 21 (Bloomberg) -- Freeport-McMoRan Copper & Gold Inc., the largest publicly traded copper producer, reported third-quarter profit that topped analysts’ estimates and increased its dividend after output and metal prices climbed. The shares rose.

Net income gained 27 percent to $1.18 billion, or $2.49 a share, from $925 million, or $2.07, a year earlier, the Phoenix-based company said today in a statement. That beat the $2.19 a share average of 17 analysts’ estimates in a Bloomberg survey. Freeport said its annual dividend will climb to $2 a share from $1.20.

Chief Executive Officer Richard Adkerson, 63, is seeking to exploit rising copper prices by increasing output at mines where the company reduced output last year and in 2008 as the global economic slowdown cut demand. Copper for delivery in three months on the London Metal Exchange averaged $7,278 a metric ton in the quarter, 24 percent more than a year earlier.

“It was a strong result,” David Radclyffe, a London-based metals and mining analyst at BMO Capital Markets, said in an e-mail. He has an “outperform” recommendation on the stock. “The increase in the annual dividend sends a strong message.”

Freeport rose $1.08, or 1.1 percent, to $96.43 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have advanced 20 percent this year.

Sales increased 24 percent to $5.15 billion, beating the $4.66 billion average estimate of eight analysts surveyed by Bloomberg. Revenue was $4.14 billion a year earlier.

Copper Sales Rise

Copper sales rose to 1.1 billion pounds from 1 billion pounds. Freeport was expected to sell 974 million pounds in the quarter, according to the average of estimates from Citigroup Inc., Credit Suisse Group AG and Morgan Stanley analysts.

“We continue to advance our future growth and expansion plans and are taking steps to increase near-term copper production in response to improved physical markets,” Adkerson said in the statement.

Freeport increased its full-year copper-sales forecast to 3.85 billion pounds from a previous prediction of 3.8 billion pounds. The company also raised its full-year forecast for gold sales 5.6 percent to 1.9 million ounces and its guidance on molybdenum sales 3.2 percent to 65 million pounds.

Fourth-quarter sales will be 895 million pounds of copper, 585,000 ounces of gold and 15 million pounds of molybdenum, the company said.

To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net.

To contact the editor responsible for this story: Simon Casey at scasey@bloomberg.net.

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