Freeport-McMoRan 1Q earns surge as demand lifts copper, gold

But industry observers said investors worried about whether the slumping American housing market would slow the rush on copper, and Freeport's shares fell 55 cents to $118.13 in afternoon trading.

"There's a lot of skepticism regarding whether copper can maintain these high (price) levels that we're experiencing," said Brian Hicks, co-manager of U.S. Global Investors' Global Resources Fund in San Antonio, Texas. The fund owns Freeport shares.

Phoenix-based Freeport said first-quarter profit more than doubled one year after it bought Phelps Dodge Corp. for $26 billion. Net income rose to $1.12 billion, or $2.64 per share, in the three-month period that ended March 31, compared with $476 million, or $2.02, a year earlier.

Quarterly sales jumped to $5.67 billion from $2.25 billion.

Analysts polled by Thomson Financial had expected a profit of $2.12 per share on $4.69 billion in sales.

"Given the very strong prices for copper, gold and molybdenum, it was a great quarter for us," Freeport Chief Executive Richard C. Adkerson said in a conference call with analysts.

Molybdenum is an element that's used in steel, cast iron, and metal alloys to enhance strength, toughness, and resistence to corrosion.

Freeport's acquisition of Phelps Dodge in March 2007 made it the largest publicly traded copper company. Besides Phelps Dodge mines, Freeport operates the Grasberg mine, one of the world's largest sources of precious metals in Papua, Indonesia.

Copper remains in high demand despite the faltering U.S. housing market because China and India continue to press for more resources. A strike by mine workers in Chile, the world's primary copper-producing nation, also is boosting copper prices.