FCX · Q4 2025 Earnings

Bullish

Freeport-McMoRan

Reported January 22, 2026

30-second summary

30-second take: Q4 FY2025 revenue fell 1.5% YoY to $5.63B and non-GAAP EPS landed at $0.47 as PTFI's mud-rush suspension absorbed Indonesian volumes (PTFI copper sales 112M lbs vs 376M lbs prior year), but consolidated copper sales of 709M lbs blew past the October sub-period marker of 635M lbs and unit cash cost came in at $2.22/lb versus the $2.47/lb marker. The forward read is the bigger story: FY2026 guide formalizes 3.4B lbs copper / 0.8M oz gold / $4.3B capex, and at recent prices ($5.75 Cu / $4,700 Au / $23 Mo) operating cash flow scenarios reach $11B versus FY2025's actual $5.6B. Management framed FY2026 as "pivotal" for the leach program (targeting 300M lbs in FY2026, scaling to 800M by 2030) and quantified a 50%+ U.S. production growth runway over 4–5 years — this is the offense-oriented narrative the recovery thesis needed.

Headline numbers

EPS

Q4 FY2025

$0.47

Revenue

Q4 FY2025

$5.63B

-1.5% YoY

Operating margin

Q4 FY2025

14.4%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$5.63B	-1.5%	$6.97B	-19.2%
EPS	$0.47	—	$0.50	-6.0%
Operating margin	14.4%	—	28.3%	-1390bps

Guidance

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Copper sales	FY 2025	3.5 billion pounds	—	—	Met
Molybdenum sales	FY 2025	82 million pounds	—	—	Met

New guidance

Metric	Period	Guide	YoY
Copper sales	FY 2026	3.4 billion pounds	—
Gold sales	FY 2026	0.8 million ounces	—
Molybdenum sales	FY 2026	90 million pounds	—
Unit net cash costs (copper)	FY 2026	$1.75 per pound of copper	—
Operating cash flows	FY 2026	$8 billion (at $5.00 copper, $4,000 gold, $20.00 moly) to $11 billion (at $5.75 copper, $4,700 gold, $23 moly)	—
Capital expenditures	FY 2026	$4.3 billion, including $3.0 billion for major mining projects	—
U.S. Copper sales	FY 2026	1.4 billion pounds	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Gold sales	FY 2025	1.05 million ounces	—	—	Lowered
Unit net cash costs (copper)	FY 2025	$1.68 per pound	—	—	Lowered
Operating cash flows	FY 2025	$5.5 billion	—	—	Lowered

Segment KPIs

Q4 FY2025

Segment	Q4 FY2025	YoY
U.S. Copper Operations	$1.8B	+6.3%
South America Copper Operations	$1.4B	-14.4%
Indonesia (PTFI) Operations	$0.575B	-63.1%
Molybdenum Operations	$0.522B	+12.5%

Other KPIs

Q4 FY2025

Segment	Q4 FY2025
Consolidated Copper Sales (Q4 2025)	709 million pounds
Consolidated Copper Production (Q4 2025)	640 million pounds
Consolidated Gold Sales (Q4 2025)	80 thousand ounces
Consolidated Molybdenum Sales (Q4 2025)	22 million pounds
Average Realized Copper Price (Q4 2025)	$5.33/lb
Consolidated Unit Net Cash Costs - Copper (Q4 2025)	$2.22/lb
Operating Cash Flow (Q4 2025)	$0.7 billion
Capital Expenditures (Q4 2025)	$1.0 billion

Management tone

Q2 anchor: Tariff-driven margin reframing → Q3 anchor: Defensive humility on cave-mining complexity → Q4 anchor: Offense-oriented growth narrative anchored in leach scaling and 50%+ production runway.

The most consequential shift is that Grasberg moved from "unprecedented incident requiring fundamental redesign" in Q3 to a de-risked, tracking-plan restart story in Q4. Last quarter, management used the word "unprecedented" and conceded that standard seismic monitoring failed to detect the cave geometry that drove the event; this quarter the language is "The progress to date continues to de-risk the plan, and in executing the restart, our team will be vigilant in prioritizing safety above all else." Mudwork is 97% complete, cement pour on protective barriers is done, and PB2/PB3 startup is locked into first half of Q2 FY2026. The shift from technical humility to execution confidence inside a single quarter is unusually fast for a complex underground restart — credible because milestones are quantified, but worth watching against the H1 Q2 startup window.

The U.S. business narrative has flipped most decisively. Two quarters ago, U.S. operations were a cost-down story riding stabilized grades; this quarter, "we're strongly positioned with a potential for an over 50% increase in copper production as we go through the next four to five years." That's a step-change in framing — from defending margins to quantifying organic growth independent of M&A. The 8% U.S. volume increase targeted for FY2026 is the first concrete milestone on that path, and management has set out a cost-improvement target that depends on leach volumes doing the cost-bridging work described in Q&A.

The leach program has been elevated from incremental innovation to strategic spine. Q2 introduced a second additive as lab-stage promise; Q3 narrowed the FY2026 target to 300M lbs; this quarter management committed to "2026 we're looking at as a pivotal year for us in this initiative as we work to scale the 400 million pounds in 2027 into 800 million pounds by 2030." The progression from experimental → narrowed target → pivotal scaling year in three quarters is the kind of forward commitment that becomes a recurring scoreboard item. 214M lbs delivered in FY2025 to 300M lbs targeted for FY2026 is a ~40% step-up that needs to land.

The demand backdrop also got a structural anchor. Prior commentary treated copper demand as cyclically supportive; this quarter management cited the S&P Global AI study projecting a doubling of copper demand through 2040 at a 2.9% CAGR. "We continue to expect the market will require additional copper supplies." This is the bullish setup for Baghdad 2X (decision midyear FY2026) and Elabra (now framed as approaching Cerro Verde scale after a 17B lb reserve addition) — long-duration projects that need conviction in price floors to clear capital allocation gates.

Hedging language remains in the right places: insurance recovery is "potential," cost guidance "approximates," and the $4.3–4.5B capex range acknowledges inflation uncertainty. The confidence (rated 4/5 in Q&A) is operational, not promotional.

Recurring themes management leaned on this quarter:

Grasberg recovery and phased restart executionU.S. business organic growth through leach innovation and automationLong-term copper demand structural tailwinds from AI and electrificationCapital-efficient brownfield expansion opportunities in established jurisdictionsFreeport as America's copper champion with 70% of U.S. refined copper productionCash flow generation and shareholder returns at elevated copper prices

Risks management surfaced:

Geopolitical conflicts and trade tariff uncertainties affecting market sentimentGrasberg production block restart complexity and execution riskMixed economic data and weakness in private construction and autosChinese economic pressures and stimulus dependency for copper demandRegulatory permitting risk for expansion projects (Elabra environmental impact statement)

Q&A highlights

Bob Brackett · Bernstein Research

Asked about the 'America's Copper Champion' strategy (targeting 2B pounds U.S. production), whether management can do more given U.S. imports, and whether copper tariffs are driving the leaching production targets or if unit economics alone justify the investment.

Management emphasized that leaching initiatives deliver very low incremental cost pounds with minimal capital requirements, as material is already mined. Baghdad project requires ~$4 copper price to justify $4B investment; current prices support it. Management not relying on tariffs to justify investment; focus is on absolute copper prices and improving U.S. resiliency. Leaching can add a 'new mine' equivalent with low operating costs and insignificant capex.

Leaching incremental costs are very low relative to mining and smeltingBaghdad expansion requires ~$4/lb copper price to justify investmentCurrent copper prices significantly higher than $4/lb breakevenProject does not require significant capital expenditure

Lawson Winder · V of A Securities

Asked for precise timing on Baghdad 2X update in 2026, clarification on CapEx inflation assumptions (5% per year from 2023 baseline of $3.5B), whether project plan changes are contemplated, and what non-price factors will influence approval decision.

Baghdad 2X decision expected at midyear 2026 following front-end engineering work and vendor fixed pricing. CapEx inflation from 2023 baseline is being assessed; managing tariff and cost inflation impacts through value engineering. Key approval factors include long-term copper price range, workforce setup, autonomous fleet optimization (target 2025 deployment), labor de-risking, and confidence in execution of capital plan and incremental cost reduction.

Baghdad 2X investment decision targeted for midyear 20262023 CapEx baseline: $3.5 billionAdded $150M capital for power infrastructure as part of project de-riskingAutonomous fleet deployment targeted for 2025 to address labor challenges

Alex Hacking · Citi

Asked how management plans to achieve 2027 U.S. cost target of $2.50/lb given current guidance of ~$3/lb for 2026 and only modest production increases, requiring 50 cents per pound cost reduction.

Cost target of $2.50/lb by 2027 is achievable through scaling the leaching opportunity and driving operational efficiencies, particularly minimizing downtime and improving existing equipment utilization. Key mechanism is adding volumes at low incremental cost without proportional increase in operating rates, bringing down the blended average cost.

2027 U.S. cost target: $2.50/lb2026 U.S. cost guidance: ~$3/lbCost reduction achieved through leaching volume additions at low incremental costEfficiency improvements focused on downtime reduction and same operating rates supporting higher volumes

Bill Peterson · JP Morgan

Asked about Indonesia Grasberg progress since November 2024 update; requested granularity on PB2/PB3 timing within Q2 2026, drivers of faster completion versus delays, and overall risk management on mud removal.

Grasberg PB2/3 mudwork 97% complete; cement pour recently completed on protective barriers. Startup expected in first half of Q2 2026, on track per November plan. Team has addressed localized drainage challenges effectively. Supply chain performing well on infrastructure/communications systems for remote mining. Cave management tools being refined; plan is solid with only minor timing variations expected. PB1 restart work ongoing in parallel.

Mudwork completion: 97% of targetPB2/PB3 startup timing: first half of Q2 2026Localized drainage issues addressed successfullySupply chain performing per expectations

Katja Jancic · BMO Capital Markets

Asked about rising South American unit cash costs and requested outlook for future cost trajectory in the region.

South America 2026 forecasted net cash costs of $2.58/lb, similar to Q4 2025 run rate of $2.57/lb. Cost increases primarily driven by labor and energy/power costs, with some impact from weaker dollar. Guidance assumes this cost level will carry forward.

South America 2026 net cash cost forecast: $2.58/lbQ4 2025 South America net cash cost: $2.57/lbPrimary cost drivers: labor and energy/power costsSecondary driver: weaker U.S. dollar

Answers to last quarter's watch list

November 18, 2025 multi-year outlook call — Delivered. The FY2026 guide formalized in this Q4 print (3.4B lbs Cu, 0.8M oz Au, $4.3B capex, $8–11B operating cash flow scenarios) is the formalization that watch item anticipated. Status: Resolved positively

PB2 and PB3 restart progress against Q2 FY2026 target — Mudwork 97% complete and cement pour on protective barriers completed; startup confirmed for first half of Q2 FY2026. Cement plug installation tracked on plan per management. Status: Resolved positively

Q4 actual idle facility costs against the ~$450M estimate — Press release disclosed $454M of idle facility costs and direct recovery expenses associated with the September 2025 mud rush incident at PTFI in Q4 FY2025 ($625M for the full year). FY2026 cost guidance explicitly excludes idle facility costs and direct recovery expenses, signaling those costs continue to flow as non-recurring items. Status: Resolved — landed essentially in line with the ~$450M estimate

FY2026 capex confirmation — Formalized at $4.3B for FY2026, including $3.0B for major mining projects, versus the prior $4.5B FY2025 capex guide. Status: Resolved (FY2026 capex set $200M below the FY2025 guide level; growth pipeline preserved with $3.0B for major mining projects)

FY2026 production guide formalization — Copper sales of 3.4B lbs sits modestly below the Q3 qualitative "similar to 2025" framing (3.5B lbs FY2025 guided, 3.57B lbs actual). Gold at 0.8M oz is materially below the FY2025 1.05M oz guide, reflecting PTFI ramp constraints. The guide is in the zone but skews slightly weaker than "similar to 2025." Status: Continue monitoring (delivery of the 3.4B lb plan, particularly PTFI's 0.9B lbs, is the test)

Muon imaging and dynamic cave management deployment — Management discussed cave management tool refinement broadly in Q&A and referenced adopting emerging imaging technology for cave-shape monitoring, but didn't disclose specific deployment progress on muon imaging. Status: Continue monitoring

U.S. leach program tracking toward 300M lbs in FY2026 — Confirmed: 214M lbs delivered in FY2025, 300M lbs targeted in FY2026, 400M lbs in 2027, scaling to 800M lbs by 2030. Management called FY2026 a "pivotal year" for the initiative. Status: Resolved positively

What to watch into next quarter

PB2/PB3 first-half Q2 FY2026 startup execution — management committed to "first half of Q2 2026" with mudwork 97% complete. Any slip into late Q2 or beyond would push the entire restart cascade right and signal residual cave-management risk; an on-time start de-risks the entire FY2026 guide.

Q1 FY2026 unit cash cost against the $2.60/lb sub-period marker — costs are guided to run $0.85/lb above the FY2026 average in Q1, normalizing as PTFI ramps. Whether actual Q1 lands at or below $2.60/lb is the first test of the cost-bridge thesis to $1.75/lb FY average.

Leach program delivery toward 300M lbs in FY2026 — the step-up from 214M lbs in FY2025 is the most concentrated single-lever execution risk in the guide. Quarterly milestones on Morenci additive scaling, the Chino "perfect pile" engineered-heat stockpile, and El Abra heat injection ramp are the gates.

Baghdad 2X midyear FY2026 investment decision — management committed to a midyear update after front-end engineering and vendor pricing. Watch for the updated capex figure (versus the 2023 $3.5B baseline plus $150M power infrastructure), commodity price scenario embedded, and whether autonomous fleet performance issues delay the timeline.

South America cost trajectory above $2.58/lb — labor and energy inflation appear structurally embedded; any further upward drift would signal South America becoming a permanent cost drag rather than a transient pressure.

PTFI insurance recovery crystallization — underground insurance cap of $0.7B subject to $0.5B deductible (potential net recovery up to ~$0.2B). A formal recovery booking would be a discrete cash event additive to the $8B base-case OCF.

Average realized copper price vs the $5.00/lb FY2026 base case — Q4 FY2025 realized $5.33/lb and management cited recent prices of $5.75/lb as the upside scenario. Sustained prices above $5.00 keep the operating cash flow walk biased toward the $11B end of the range.

Sources

Freeport-McMoRan Q4 2025 Press Release (Exhibit 99.1): https://www.sec.gov/Archives/edgar/data/831259/000083125926000006/a4q2025exhibit991.htm
Freeport-McMoRan Q4 2025 earnings call commentary (prepared remarks and Q&A as captured in analyst exchange data)

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