Freeport-McMoRan Copper & Gold Inc. (
FCX)
Q1 2010 Earnings Call Transcript
April 21, 2010 10:00 a.m. ET
Executives
Kathleen L. Quirk - Executive Vice President and Chief Financial Officer
Richard C. Adkerson - President and Chief Executive Officer
Mark D. Johnson - COO, Indonesian Operation
James R. Moffett - Chairman
David H. Thornton - President, Climax Molybdenum
Analysts
Michael Gambardella - J.P. Morgan
Anthony Rizzuto - Dahlman Rose & Co.
Kuni Chen - Banc of America/Merrill Lynch
David Gagliano - Credit Suisse
Sal Tharani - Goldman Sachs
Mark Liinamaa - Morgan Stanley
John Redstone - Desjardins Securities
Charles Bradford - Affiliated Research Group LLC
Lark Smith - Scotia Capital Markets
Sanil Daptardar - Sentinel Investments
Justine Fisher - Goldman Sachs
David Katz - J.P. Morgan
Presentation
Operator
Ladies and gentlemen, thank you for standing by. Welcome to the Freeport-McMoRan Copper & Gold First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer. If you wish to ask a question during the Q&A session, press star one on your touchtone phone. If you require assistance during the conference, please press star zero.
I would now like to turn the conference over to Ms. Kathleen Quirk, Executive Vice President and Chief Financial Officer. Please go ahead, ma''am.
Kathleen L. Quirk
Thank you and good morning, everyone. Welcome to the Freeport-McMoRan Copper & Gold first quarter 2010 earnings conference call. Our results are released earlier this morning and a copy of the press release is available on our website at fcx.com.
Our conference call today is being broadcast live on the internet and anyone may listen to the call by accessing our website home page and clicking on the webcast link for the call. We also have several slides to supplement our comments, those are also available on our webcast link at fcx.com. In addition to analysts and investors, the financial press has also been invited to listen to today''s call and a replay of the webcast will be available on our website later today.
Before we begin today''s comments, we''d like to remind everyone that today''s press release and certain of our comments on this call include forward-looking statements. I want to refer everyone to the cautionary language included in our press release and presentation materials and to the risk factors described in our SEC filings.
On the call today are Richard Adkerson, President and Chief Executive Officer; Jim Bob Moffett, our Chairman of the Board. I have got number of our senior operating team here today including Red Conger, Dave Thornton and Mark Johnson. I''ll start by briefly summarizing our financial results and then turn the call over to Richard who will be going through our presentation materials. We will then open up the call for the Q&A.
Today, FCX reported first quarter 2010 net income applicable to common stock of $897 million, $2 per share as compared with net income of $43 million or $0.11 per share in the first quarter of 2009. Our 2010 first quarter results include losses on the early extinguishment of debt totaling $23 million to net income or $0.05 per share.
Our first quarter consolidated as copper sales of 960 million pounds were higher than the January 2010 estimate of 890 million pounds but below first quarter 2009 copper sales of 1 billion pounds. The favorable variance to the January 2010 estimate, however, reflects the timing of sales from our North American copper mines and the variance to the 2009 period reflects the anticipated lower copper ore grades at Grasberg resulting from our plan mine sequencing and lower sales from our South America mines in the first quarter as anticipated.
These lower sales were partly offset by sales from the Tenke Fungurume mine in Africa where we sold over 60 million pounds of copper in the first quarter. Our consolidated gold sales for the first quarter of 2010 totaled 478,000, that was slightly less than our previous estimate of 490,000 ounces and lower than the first quarter of 2009 sales of 545,000 ounces that reflects the lower ore grades at Grasberg resulting from the lower grade material that we are currently mining.
Our molybdenum sales of 17 million pounds in the first quarter of 2010 were significantly higher than last year''s first quarter of 10 million pounds and higher than our estimate of 15 million pounds because of improved demand in the metallurgical and chemical sectors of the molybdenum markets.
Our first quarter results reflect improved pricing for all of our products, copper, gold and molybdenum. Our realized price for copper was $3.42 per pound in the first quarter that was almost double the price in the year-ago quarter. Our gold realization was 1110 per ounce in the first quarter 2010 that compared with $904 per ounce in first quarter of 2009 and our realized molybdenum price of $15.09 per pound in the first quarter of 2010 was over 30% higher than last year''s first quarter.
Our consolidated unit net cash cost averaged $0.81 per pound in the first quarter of 2010. As anticipated, it was higher than the $0.66 per pound reported in the first quarter of 2009. As previously discussed, our higher unit cost in 2010 primarily reflect the anticipated lower copper volumes at Grasberg.
