January 22, 2026
Finance

Freeport-McMoRan Posts Strong Q4 Earnings Amid Operational Challenges at Grasberg

Copper and gold output impacted by mud rush incident; company outlines cautious 2026 production outlook

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Summary

Freeport-McMoRan Inc. released its fourth-quarter results for fiscal year 2025, surpassing revenue and earnings per share expectations despite disruptions at the Grasberg mine. The company reported ongoing operational suspension due to a September mud rush event, which has affected copper and gold production volumes. Looking ahead, Freeport-McMoRan projects phased resumption of the Grasberg operations and substantial capital expenditures to support major mining projects during 2026.

Key Points

Freeport-McMoRan exceeded Q4 2025 revenue and adjusted EPS expectations, posting $5.63 billion and 47 cents respectively.
Copper and gold production declined due to suspension of operations following a mud rush incident at the Grasberg mine in September 2025.
The company plans a phased resumption of Grasberg underground mining operations starting Q2 2026, aiming for higher sales in H2 2026.
2026 capital expenditures are projected at $4.3 billion, with $3.0 billion dedicated to major mining projects.

Freeport-McMoRan Inc. (NYSE:FCX) announced its financial and operational results for the fourth quarter of fiscal year 2025 on Thursday, reporting better-than-anticipated revenue and earnings performance despite operational setbacks at the company's Grasberg mining complex.

The company posted quarterly revenues of $5.63 billion, exceeding market expectations of $5.36 billion. Adjusted earnings per share (EPS) came in at 47 cents, outperforming the consensus estimate of 29 cents. Net income attributable to common stockholders reached $406 million, translating to 28 cents per share for the quarter.

Production and Sales Overview

In terms of production volumes, Freeport-McMoRan extracted 640 million pounds of copper, while sales volume registered at 709 million pounds. Gold production during the quarter was 65,000 ounces, with corresponding sales of 80,000 ounces. Molybdenum output amounted to 25 million pounds, and sales totaled 22 million pounds.

However, copper and gold production experienced declines compared to the previous year. This reduction was primarily attributable to the temporary suspension of operations at the Grasberg mine following a significant mud rush incident in early September 2025. The event, originating from the mine’s former open pit section, trapped seven workers and affected multiple levels within the mine infrastructure. Freeport-McMoRan halted activities at the site to focus on rescue and safety measures.

Pricing and Cost Metrics

During the reported quarter, the average realized price of copper stood at $5.33 per pound. Gold achieved an average price of $4,078 per ounce, and molybdenum sold at $23.77 per pound. Unit net cash costs for copper rose to $2.22 per pound, up from $1.66 per pound recorded in the same period the previous year, marking an increase in production expense per unit.

Capital Expenditures and Financial Position

Capital spending in Q4 totaled $1.0 billion, with $600 million allocated towards major mining projects aimed at sustaining and expanding production capabilities. As of the end of December 2025, Freeport-McMoRan reported cash and cash equivalents totaling $3.8 billion and total debt obligations amounting to $9.4 billion.

Outlook for Fiscal Year 2026

Looking forward, the company anticipates sales of approximately 3.4 billion pounds of copper, 0.8 million ounces of gold, and 90 million pounds of molybdenum for the full year 2026. These projections incorporate expectations for a phased restart and ramp-up of the Grasberg Block Cave underground mine starting in the second quarter of 2026 at PT Freeport Indonesia (PTFI). The company foresees that the bulk of copper and gold sales—approximately 60% and 75% respectively—will occur during the latter half of the year.

Freeport-McMoRan also noted it anticipates production volumes for copper and gold to surpass sales quantities over the year, indicative of inventory buildup. This includes deferrals of roughly 100 million pounds of copper and 100,000 ounces of gold held within PTFI's smelting inventory.

For the immediate first quarter, the company projects sales of 640 million pounds of copper, 60,000 ounces of gold, and 22 million pounds of molybdenum. Furthermore, the forecasted capital expenditures for 2026 are about $4.3 billion, with $3.0 billion earmarked for significant mining development projects.

Management Commentary and Market Reaction

Kathleen Quirk, President and Chief Executive Officer of Freeport-McMoRan, affirmed the organization's strong strategic positioning entering 2026. She highlighted the company’s extensive global copper footprint and the ongoing advancement of development projects as key elements underpinning the outlook. Quirk emphasized the firm's commitment to safely and sustainably restoring operations at the Grasberg mine, focusing on value creation through enhanced operational efficiency, innovation, and strict execution disciplines.

At the time of reporting on Thursday, Freeport-McMoRan shares were trading down 1.73% at $59.53, approaching their 52-week trading high of $62.12. Market data indicated mixed momentum with observed price volatility in response to operational news and broader market conditions.

Risks
  • Temporary operational suspension at Grasberg due to safety incident limits production and impacts sales volumes.
  • Elevated unit cash costs for copper could pressure margins if commodity prices fluctuate.
  • High leverage with $9.4 billion in total debt may constrain financial flexibility during operational disruptions.
  • Production deferrals resulting in inventory buildup could affect near-term cash flows and sales realization.
Disclosure
Education only / not financial advice
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