Freeport-McMoRan (NYSE: FCX) Q2 2026: EPS Beats but Costs and Volume Pressure Operating Income

Freeport-McMoRan (NYSE: FCX) reported Q2 2026 adjusted EPS of $0.74, beating the $0.60 Wall Street consensus by 24.2%, while GAAP EPS came in at $0.68, up 28.3% from $0.53 in Q2 2025. Despite the bottom-line beat, revenue fell 7.3% year over year to $7.03 billion, and operating income contracted 17.6% to $2.00 billion, as sharply lower sales volumes and rising unit costs offset the benefit of higher realized commodity prices.

Q2 2026 Results

• Adjusted EPS of $0.74 beat the $0.60 consensus estimate; GAAP net income attributable to common stock totaled $984 million, up 27.5% from $772 million in Q2 2025.
• Revenue of $7.03 billion declined 7.3% year over year from $7.58 billion, as copper sales volumes fell 30.1% to 710 million pounds (from 1,016 million pounds in Q2 2025) and gold sales collapsed 76.4% to 123 thousand ounces (from 522 thousand ounces).
• Operating income of $2.00 billion dropped 17.6% from $2.43 billion in Q2 2025, with the GAAP operating margin contracting 3.6 percentage points to 28.5%.
• Operating cash flow of $2.05 billion was generated in the quarter, net of $596 million in working capital and other uses; capital expenditures totaled $1.10 billion, down 12.5% from $1.26 billion in Q2 2025, yielding free cash flow of $944 million.
• GAAP results included $96 million in after-tax charges ($0.06 per share) for idle facility and restoration costs tied to PT Freeport Indonesia's (PTFI) September 2025 external mud rush incident.

What Drove the Results

Adjusted EPS of $0.74 beat the $0.60 consensus by 24.2%, but the revenue and operating income picture reflects significant operational disruption at PTFI. Copper unit net cash costs per pound surged 74.3% year over year to $1.97 in Q2 2026 from $1.13 in Q2 2025, while site production and delivery costs per pound rose 21.0% to $3.28 from $2.71. The steep drop in gold sales volumes, from 522 thousand ounces to 123 thousand ounces, removed a high-margin by-product credit stream that had supported unit economics in the prior-year period.

Realized commodity prices provided a meaningful offset: average realized copper prices rose to $6.17 per pound from $4.54, and gold averaged $4,520 per ounce versus $3,291 in Q2 2025. Copper sales of 710 million pounds also exceeded Freeport's own April 2026 estimate of 690 million pounds, reflecting better-than-expected shipment timing and operating performance. The GAAP-to-adjusted divergence of $0.06 per share is attributable entirely to the mud rush incident charges, a non-recurring item that the company has disclosed separately.

Guidance and Capital Allocation

For full-year 2026, Freeport expects consolidated copper sales of approximately 3.1 billion pounds, gold sales of 650 thousand ounces, and molybdenum sales of 93 million pounds. Q3 2026 copper sales are guided at approximately 750 million pounds. Average unit net cash costs are expected to average $1.90 per pound of copper for the full year. Full-year operating cash flows are projected at approximately $8.3 billion under assumed prices of $6.00 per pound for copper, $4,000 per ounce for gold, and $30.00 per pound for molybdenum for the second half. Full-year capital expenditures are expected to reach approximately $4.3 billion, including $3.0 billion allocated to major mining projects.

During Q2, FCX also purchased 1.7 million shares of its common stock for $110 million at an average cost of $64.34 per share, and acquired an additional 2.0 million shares of Cerro Verde common stock for $107 million, increasing its Cerro Verde ownership from 55.08% to 55.66%.

Wall Street View

Wall Street consensus heading into the print was broadly constructive, supported by elevated copper and gold prices. The adjusted EPS beat of 24.2% is consistent with two prior quarters of double-digit positive surprises: $0.57 actual versus $0.46 consensus in Q1 2026, and $0.47 actual versus $0.29 consensus in Q4 2025. No specific new analyst price targets or rating changes were available at the time of publication.

Investor Takeaway

The Q2 2026 result illustrates a company generating strong earnings despite a materially disrupted operating profile at its flagship Grasberg complex. The key forward question is the pace of PTFI's recovery: gold sales volumes of 123 thousand ounces versus 522 thousand ounces a year ago represent a structural margin headwind that higher copper prices cannot fully replace. With full-year capex guidance of $4.3 billion and the Grasberg Block Cave ramp described as progressing on schedule, investors should monitor whether H2 2026 volume recovery is sufficient to bring unit cash costs back toward the $1.90 per pound full-year target and support the projected $8.3 billion in annual operating cash flow.