Freeport beats profit forecasts despite Grasberg slump

Freeport-McMoRan (NYSE:FCX) beat Wall Street’s second-quarter profit estimates as soaring copper prices and stronger-than-expected copper sales offset lower production from its flagship Grasberg mine in Indonesia.

The world’s largest publicly traded copper producer reported second-quarter net income of $984 million, while adjusted earnings came in at $0.74 per share for the three months ended June 30, ahead of analysts’ consensus estimate of $0.59, according to LSEG. Adjusted earnings excluded charges related to an idle facility and restoration costs at PT Freeport Indonesia. Shares rose 1.4% in premarket trading, but were trading almost 3% lower mid-afternoon to $63.36 each.

Freeport realized an average copper price of $6.17 per lb during the quarter, up from $4.54 per lb a year earlier, as supply concerns, resilient Chinese demand and geopolitical tensions in the Middle East lifted prices. Higher gold prices also supported margins and cash flow.

Copper sales exceeded the company’s April guidance, helped by shipment timing and improved operating performance, even as copper production fell 18.2% to 786 million lb and gold output dropped 39.4% to 192,000 oz. Sales totalled 710 million recoverable lb, down from one billion recoverable lb a year earlier, while gold sales plunged 76% to 123,000 oz.

Grasberg ramp-up

Production continues to recover after about 800,000 t of wet material flooded the Grasberg mine on last September, forcing a suspension of operations. Earlier this year, PT Freeport Indonesia said recovery at the world’s second-largest copper mine and largest gold mine was taking longer than expected, though operations are expected to approach full capacity by the end of 2027.

The complex is currently operating at about 50% of capacity and is expected to reach 65% later this year, with continued progress on the Grasberg Block Cave underground ramp-up supporting performance.

Freeport reaffirmed its 2026 outlook, forecasting copper sales of 3.1 billion lb and gold sales of 650,000 oz. The company expects average unit net cash costs of $1.90 per lb of copper and plans to spend $4.3 billion in capital this year, including $3 billion on major mining projects.

The results underscore how elevated copper prices continue to cushion miners from operational disruptions. With global supply expected to remain tight and demand supported by electrification, investors remain focused on Freeport’s ability to restore Grasberg to full production while delivering growth from its broader project pipeline.

Analysts remain broadly bullish on the stock, with 21 of 26 firms rating the shares a buy or strong buy and a median 12-month price target of $74, about 14% above Wednesday’s close.