April 22 (Reuters) - North American copper miners are
expected to report a decline in first-quarter earnings this week
due to lower prices of the red metal amid persistently high
    Freeport-McMoRan and Canada's Teck Resources
 are expected to post a combined adjusted net income
of $666.3 million, according to LSEG estimates, compared with
$1.43 billion in the year-ago quarter. 
    Copper prices touched a multi-year high last month after
major Chinese copper smelters agreed to limit capacity
    Despite the late rally, average benchmark copper prices
 were down about 5% during the quarter compared to last
year, weighed by concerns over demand in top-consumer China and
fears of elevated interest rates.
    "I would expect first-quarter cash flow to be low because,
again, the copper price had not yet really risen," said Chris
LaFemina, managing director, global metals and mining equities
research at Jefferies.
    The miners are also grappling with a labor shortage,
especially in countries such as the U.S., and lower grades of
ore, raising the per-unit production cost.  
    "In mining, costs tend to lag prices. So when the prices go
down, it takes time before the costs are actually lower,"
LaFemina said.
    In addition, Teck's quarterly earnings may see a hit from
inclement weather in British Columbia, while Freeport's ongoing
tussle with the Indonesian government over export permits could
add to its costs, analysts said.
    Over 50% of Wall Street analysts who cover Freeport and Teck
have lowered their earnings estimates for both miners in the
past 30 days, according to LSEG data.   
    However, a surge in the prices of gold, often mined as a
by-product, could provide relief to miners like Freeport,
analysts said.
    "We think estimates are too pessimistic for
Freeport-McMoRan, as the consensus doesn't appear to be giving
Freeport credit for the significant gold production from
Grasberg in Indonesia," CFRA analyst Matthew Miller said in a
    The late rally in copper prices will likely boost the free
cash flow of miners in the second quarter, analysts said. 
 Company            LSEG Q1 EPS      LSEG Q1 Revenue
                    Estimate         Estimate
 Freeport-McMoRan   27 cents         $5.66 billion
 Teck Resources     89 Canadian      C$4.07 billion
 Company              Recommendation   Median Price Target
 Freeport-McMoRan     Thirteen of 23   $51
                      brokerages rate  
                      the stock "buy"  
                      or higher and    
                      10 "hold"        
 Teck Resources       All 12           C$68.50
                      brokerages rate  
                      the stock "buy"  
                      or higher        
 (Reporting by Sourasis Bose in Bengaluru; Editing by Pooja