Freeport-McMoRan (FCX) Q3 2026 earnings review
High copper prices lift Freeport, but its volume plans shrink
Freeport earned far more this quarter because copper prices rose, even though it sold less metal in every region. Profit per share excluding one-offs climbed 76%, while copper sales fell 23% as Grasberg, its Indonesian mine, keeps ramping back up after last year's mud rush. Chief executive Kathleen Quirk said the ramp-up met expectations.
| Profit per share, excluding one-offs | $0.88 $0.50 a year ago |
|---|---|
| Copper sold | 749 million lbs -23% from a year ago |
| Realized copper price | $6.54 per lb +40% from a year ago |
| 2026 copper sales outlook | Cut to ~2.99 billion lbs 3,057 million in July; 3.4 billion in January |
⚖️ Verdict: 🔴 Bearish
The story got worse because the volume plan shrank while its cost grew: Freeport trimmed its 2026 and 2027 copper targets, pushed the leach target into 2027, and raised next year's capital budget. Prices, not metal, paid for the profit. The good news: Grasberg ran at the planned rate and its smelter restarted, so the recovery is on schedule.
The question now is whether next year's extra volume arrives at a cost Freeport can hold. Either Grasberg's low-cost pounds pull the average back down in 2027, or energy, acid and capital inflation eat what the volume adds. The fourth-quarter cost, which the company puts at $1.68 a pound, gives the first reading in January.
🐂 Bull Case
Grasberg Mines More Than It Sells
Grasberg is Freeport's copper and gold mine in Indonesia, run through PTFI, a unit it owns 49% of. A mud rush shut the main underground section in September 2025, and next year's volume plan depends on the restart because the site normally yields about 1.7 billion pounds of copper a year.
This quarter the mill ran at 67% of capacity, and the ramp-up, the company said, "met expectations with significant growth expected in 2027 and 2028". PTFI's smelter restarted in late August, while Production Block 1S, the damaged section, stays shut until mid-2027.
- Copper: 249 million pounds mined in Indonesia, 153 million sold
- Gold: 229 thousand ounces mined, 98 thousand sold
- Block Cave mining rate: 70 thousand tonnes a day, up from 53 thousand last quarter
The gap matters because the metal sits as smelter inventory, so it becomes revenue later rather than never. By our math the full-year plan implies 315 million pounds of Indonesian copper sales in the fourth quarter, double any quarter since the incident.
What to watch: fourth-quarter Indonesian copper sales against that 315 million pounds. A figure near it would show the restarted smelter turning inventory into cash, which is what next year's volume step rests on.
Mines in the Americas Now Earn Most Profit
Freeport also mines copper in Arizona, New Mexico, Peru and Chile, and with Grasberg at two-thirds capacity these mines carried the quarter. Their operating income more than doubled from a year ago while Indonesia's halved, so by our math the Americas earned 74% of mining profit, up from 41%.
The shift matters because Freeport owns its U.S. mines outright but only half of PTFI, so the minority partners' share of profit fell to 22% of pre-tax income from 30%. Both regions sold less copper than a year ago, though, so the gain is price rather than metal.
What to watch: fourth-quarter U.S. copper sales against the roughly 320 million pounds the full-year plan implies, by our math. Weather held mining rates below plan this quarter, so a reading near that figure would show the mines back at spring rates.
Molybdenum Price Jump Lowers Copper Costs
Molybdenum hardens steel, and Freeport is its largest producer, from two Colorado mines and as a copper by-product. The price reached $32.46 a pound, up 35% from a year ago, and chief executive Kathleen Quirk named it beside copper as the pricing that "drove strong margins".
- Molybdenum mines gross profit: $55 million, up from $5 million
- By-product credit at U.S. copper mines: $0.89 a pound, up from $0.61
The credit matters because Freeport reports copper costs net of by-product revenue, so a dearer molybdenum pound lowers the headline copper cost even as mining costs rise. That is why the $1.90 full-year cost plan held despite dearer energy and acid.
What to watch: the fourth-quarter plan assumes $32 a pound, and each $2 move changes the year's copper cost by a cent. A January price below that assumption would push the cost figure above plan.
Positives this quarter didn't test
Three standing positives got no new numbers this quarter, so the results neither confirm nor weaken them, and each has a reading due next year.
- U.S. mining rates and automation: rates ran 10% above a year ago but 3% to 5% below plan because of weather; fourth-quarter U.S. volume shows whether the plan rate returned.
- Safford/Lone Star expansion in Arizona: studies due in 2027 would give the first resource and capital figures.
- El Abra expansion in Chile: the environmental study sits with regulators and permitting takes two to three years; approval starts the clock.
🐻 Bear Case
Higher Prices, Not More Copper, Lifted Profit
"Favorable pricing for our products, particularly for copper and molybdenum, drove strong margins with substantial conversion to bottom-line results, highlighting the strength of our diversified portfolio," chief executive Kathleen Quirk said. The second half is the claim to test, because the portfolio did not spread the volume loss: all three regions sold less copper than a year ago.
- Copper sold: 749 million pounds, down 23%; U.S. down 2%, South America down 5%, Indonesia down 58%
- Realized copper price: $6.54 a pound, up 40%
- Cost per pound after by-product credits: $2.07, up 48% and 7 cents above the July plan
- Production and delivery costs: 59% of revenue, down 1 point; depreciation down 2 points of revenue
Margins widened only because price rose faster than costs. Freeport attributes the higher unit cost to "higher production costs, including for energy and other consumables": energy adds about $500 million this year, and spot sulfuric acid, which leaching consumes, costs more than twice last year's average. The U.S. tariff review on refined copper went unmentioned.
That matters because the leverage runs both ways. Freeport puts each 10-cent move in copper at about $390 million of yearly EBITDA from next year, so a retreat would remove profit as fast as the rise added it.
What to watch: fourth-quarter copper volume against the 875 million pounds planned, read beside the realized price. Volume at plan would show the recovery standing on its own rather than on the copper price.
Leach Target Slips a Second Year
Freeport's leach initiative recovers copper from old stockpiles with additives and heat, at far lower cost than mining fresh ore, and it is the stated route to cheaper U.S. pounds, which cost $3.16 each this quarter. The target has been a yearly run rate of 300 million pounds, set first for the end of last year and then for the end of this one.
This quarter the target moved again, to "300 million pounds in 2027" from "the current run rate of approximately 220 million pounds of copper per annum", with no quarter attached. The quarter itself held up. Incremental pounds came to 55 million, up from 47 million in the spring and level with a year ago, but two years of flat output is not a path to the target.
What to watch: the fourth-quarter figure and whether January's outlook attaches a quarter to the new date. The two new additives go into stockpiles only in the first half of 2027, so a fourth quarter above 60 million pounds, the best to date, would be the first sign the run rate can rise without them.
The Capital Bill Grows Faster Than the Volumes
Freeport funds growth from cash flow and promises shareholders half of what remains after planned capital spending, so a rising capital bill reaches the payout directly. The bill rose again this quarter, and "CAPEX inflation trend continues above CPI", the company said.
- 2026 capital spending: $4.4 billion, up from $4.3 billion in July
- 2027 capital spending: $5.2 billion, up from $4.8 billion in July and $4.5 billion in January
- Bagdad expansion: about $4.5 billion, plus $0.2 billion of early works already spent
- Kucing Liar: $1.6 billion spent, about $4 billion to go, and the start-up schedule now "under review"
The dates slip with the costs. The Atlantic Copper recycling plant in Spain, due to start in the second half of this year, now starts in mid-2027, and the Grasberg switch from coal to gas moves to late 2028. Kucing Liar is the new item: that deposit is meant to keep Grasberg at full output from 2030, so a delay there moves volumes, not just spending.
This matters because the 2027 volume step that justifies the spending shrank this quarter, to 3.7 billion pounds from 3.8 billion, while the cost of reaching it grew. More capital per pound of growth leaves less for the payout, which already excludes discretionary projects from the cash it shares.
What to watch: the Bagdad decision due before year-end and the capital figure attached to it. A number above $4.5 billion, or another rise in the 2027 capital plan in January, would mean inflation is still outrunning the offsets Freeport describes.
Indonesia Adds a Gold Export Dispute
PTFI, the Indonesian unit Freeport manages and owns 49% of, needs the government on three fronts: the licence extension beyond 2041, tax, and now gold exports. The licence application went in during June and the amended licence has not yet arrived, while the viability of Production Block 1C and the disputed tax assessments got no new word.
Gold is the new item. Freeport plans to sell 300 thousand ounces in the fourth quarter, nearly triple this quarter, and may need to export some of it. Current rules carry a 10% duty on refined gold exports, which the company says conflicts with its licence terms, so "PTFI is seeking clarity from the Indonesia government on administrative procedures".
This matters because 60 thousand ounces already slipped from this quarter into the next, pushing the unit cost 7 cents above plan, and a duty dispute could delay them again. One point the other way: PTFI did receive confirmation of smelter-related tax benefits this quarter, worth $31 million for last year.
What to watch: fourth-quarter Indonesian gold sales against the roughly 300 thousand ounces the plan implies for PTFI, by our math. Delivery in full would show the export question settled for now; the amended licence, whenever issued, settles the larger one.
👓 Other Themes
Bagdad Decision Due Before Year-End at $4.5 Billion
Freeport expects to decide in the fourth quarter whether to double the concentrator at Bagdad, Arizona, adding 200 to 250 million pounds of copper a year. The capital estimate remains under review. It stands at about $4.5 billion, with construction of up to four years. Freeport says the economics work at about $4 a pound of copper, and the expanded mine would be "the second-largest copper mine in the U.S.".
💲 Other KPIs
Inventories grew for a third quarter, up 7% from June and 13% since year-end by our math. The build is deliberate: refined copper and gold sit at PTFI's smelters until sales catch up, and Freeport expects about 100 million pounds of copper to stay there at year-end. That is why operating cash flow carried a $0.4 billion working-capital drag this quarter.
Net debt fell to $1.8 billion from $2.3 billion at year-end, leaving out the $3.2 billion borrowed for PTFI's smelter and refinery. The figure sits well under the $3 billion to $4 billion range that caps shareholder payouts, so the payout framework has room. Freeport also extended PTFI's credit line to 2031, matching its own and Cerro Verde's.
Cash from operations rose 17% from a year ago and roughly matched the spring quarter. The figure is after $0.4 billion tied up in working capital, most of it inventory. Nine-month cash flow of $5.5 billion is 12% ahead of last year, so the full-year plan needs a fourth quarter half again as large as this one.
Freeport bought back shares at its highest price yet. It paid $70.75 a share on average, against $40.58 across the whole program. The buying continues as copper prices rise rather than fall. Purchases so far this year total $305 million, nearly triple a year ago, alongside $650 million of dividends.
🔮 Guidance
Cut. The plan now has copper sales of about 2.99 billion pounds this year, 66 million below July. It is the third cut since January, and by our math the year ends 16% below 2025. The fourth quarter carries 875 million pounds, the most since the mud rush, and by our math 315 million of that comes from Indonesia.
New. Freeport plans 875 million pounds for the fourth quarter, 17% above this quarter and 23% above a year ago. That is a smaller step than July implied. By our math the July outlook pointed to about 940 million for the quarter, so the plan dropped 65 million, with the difference expected to sit in smelter inventory at year-end. Sales have landed within 3% of plan in four of the last five quarters.
Cut by 5 thousand ounces, a rounding move; the real change is timing. The fourth quarter now carries 300 thousand ounces, nearly triple this quarter. The reason is the deferral: about 60 thousand ounces of refined gold slipped out of the third quarter. By our math the year ends 39% below 2025, and the fourth-quarter figure depends on PTFI's refinery and on the export duty question.
Unchanged. The plan keeps molybdenum sales at 93 million pounds, with 22 million in the fourth quarter, the same as this quarter. The volume is not the question. Nine-month sales of 71 million are already 16% above last year on shipment timing. Price matters more: the plan assumes $32 a pound, close to this quarter's $32.46.
Unchanged. The plan still has copper costing $1.90 a pound for the year after by-product credits, which needs $1.68 in the fourth quarter, the lowest since the mud rush. The drop comes from volume, because Grasberg's cheap pounds and 300 thousand ounces of gold credits land in one quarter. Before credits the cost keeps rising: $3.34 a pound planned against $3.24 this quarter. This quarter missed its own plan by 7 cents.
Raised. The plan now has $8.5 billion of operating cash for the year, up $0.2 billion from July. By our math that leaves about $3.0 billion for the fourth quarter. The raise comes from price: the copper assumption moved to $6.50 from $6.00. At the stated sensitivity that change alone is worth about $375 million, so at July's price the figure would have fallen.
Raised by $0.1 billion. By our math that leaves about $1.16 billion for the fourth quarter, level with this quarter. The figure had held at $4.3 billion through every update since January, so this is the first move up, and it includes about $650 million at Bagdad for tailings and early works ahead of the investment decision.
Cut. Next year's copper sales plan is now 3.7 billion pounds, 100 million below July. January's first figure was 4.1 billion. Growth from this year's base is still about 23% by our math, because the base fell too. The step rests on Grasberg reaching 80% of capacity by mid-2027, and the following year adds 11%, unchanged.
Raised by $0.4 billion, the second rise this year after a $0.3 billion move in July. Discretionary projects take $2.0 billion, mostly Kucing Liar and Bagdad early works, and Bagdad's main spending still sits outside the figure pending the decision. The plan is 18% above this year's by our math, while 2027 copper volumes rise 23%, so spending and growth move together for now.
Unchanged at about 30% for the year. This quarter came in at 27% because the United States, where Freeport pays a 10% rate, earned a larger share of profit. The fourth quarter leans the other way. Indonesia pays 36% and Peru 40%, and Grasberg's share of profit rises with its volumes, so the rate climbs back toward plan.
Raised by $0.3 billion. Minority partners in PTFI, Cerro Verde and El Abra take about 24% of pre-tax income for the year, against 22% this quarter, because Grasberg's fourth-quarter volumes shift profit to the unit Freeport owns only half of. Higher metal prices lift the dollar figure; the share stays near July's 24%.
❓ Key Questions
Which quarter of 2027 does the leach target now mean?
The 300 million pound run rate has moved from end-2025 to end-2026 to "2027" with no quarter attached. A date, and the pounds the Morenci additive has delivered so far, would show whether the new target is a plan or an aspiration.
What holds Bagdad's incentive price at $4 after the cost rise?
Capital rose about 30% to $4.5 billion while the incentive copper price stayed at $4. Throughput, autonomous haulage and the molybdenum assumption each carry part of the offset; their sizes have not been disclosed before a decision due within weeks.
Will PTFI pay the 10% duty on gold exports?
The fourth-quarter plan needs about 300 thousand ounces of PTFI gold sales, and some may have to be exported. If the duty applies, how much of the quarter's gold is at risk of delay, and what would it cost?
Why is the Kucing Liar schedule under review?
The release says the start-up schedule is being reviewed while PTFI prioritises the Block Cave ramp-up. A delay from 2030 would move the 2030 volume path and the $4 billion of remaining spending; investors need the new date.
How long can Grasberg's mill run on a dry season?
Dry weather helps mining but is already straining the milling process, with limited effect so far. What mill rate does the plan assume for the fourth quarter, and at what point would water limits cut throughput?