My goodness, Phelps Dodge (NYSE:PD) saved the best for last. On Monday, the Phoenix-based company -- which likely will be acquired by Freeport-McMoRan Copper & Gold (NYSE:FCX) in March -- posted a tenfold increase in its profit for the final quarter of 2006.

According to the company, its net earnings for the quarter were $1.3 billion, or $6.50 per share, compared with $121 million, or $0.60 per share, for the same quarter of 2005. Analysts apparently had expected $4.28 per share.

To review the bidding, in November, Freeport announced a $26.3 billion -- or $129.07 per share -- offer for the outstanding shares of the larger Phelps Dodge. The offer represented about a 35% premium to Phelps Dodge's share price before the announcement. It was thought that, given Freeport's smaller size, other potential acquirers might well emerge to bid for Phelps Dodge.

Among those mentioned prominently as potential suitors was Australia's BHP Billiton (NYSE:BHP), a diversified mining and energy giant with interests in base metals (including copper), aluminum, carbon steel, energy coal, and oil and gas. Southern Copper (NYSE:PCU), which in turn is controlled by Grupo Mexico, was also discussed as a potential bidder for Phelps Dodge, Freeport, or both. At this point, however, it doesn't appear there will be other bids, so the Freeport-Phelps Dodge combination probably will be completed in the next 60 days.

A part of the recent intrigue about copper has been the slide in prices since the middle of 2005. In May, the price per pound for the base metal reached $3.80, after spending most of the prior decade at levels far lower. In fact, a year earlier the price was less than $2.00 a pound. In the fourth quarter of last year, it averaged $3.20 a pound, but on Monday was down to $2.55. Its absolute levels in the future will depend on factors such as the opening of new mines in various parts of the world, the degree of labor unrest in places like Chile, and worldwide economic vitality, and on specific factors such as U.S. housing and automobile demand.

Given the relatively recent run-up in prices, Phelps Dodge's earnings have been constricted by the company locking in portions of its production at earlier, lower levels. In the most recent quarter, however, changes in the value of its hedges added $156.7 million, or $0.77 a share, to earnings.

And so the investing play that will result from the Phelps Dodge-Freeport combination will, of course, be Freeport, which will become a copper- and molybdenum-producing giant. However, with the direction of copper prices being difficult to predict, I'd urge Fools to watch the company closely but await the conclusion of the merger before initiating or adding to positions. By that time, the direction of the U.S. economy likely will be more discernible.

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Fool contributor David Lee Smith owns no shares in any of the companies mentioned. He welcomes your questions or comments.