FREEPORT-MCMORAN INC (FCX)·Q2 2025 Earnings Summary

Executive Summary

• Strong beat on both revenue and EPS. Q2 revenue was $7.58B vs S&P Global consensus $7.19B, and adjusted EPS was $0.54 vs $0.44; management also delivered lower unit net cash costs ($1.13/lb) and higher realized prices ($4.54/lb) . Q2 2025 actual vs. consensus in “Estimates Context” below (S&P Global).
• Guidance reset: 2025 copper held effectively flat vs April while gold cut meaningfully on Grasberg gold grade timing; 2025 unit net cash costs raised to $1.55/lb (from $1.50). Q3 2025 mix shifts: lower copper/moly sales vs April, but higher gold sales .
• U.S. tariff tailwinds: COMEX-LME premium widened to ~28% (as of 7/22), implying ~$1.7B annualized cash flow uplift from U.S. sales; 2025 operating cash flow guided to ~$7.0B baseline and ~$7.9B including $1.25/lb premium assumption .
• Indonesia smelter startup reached first anode in July; first cathode expected by end of July. This supports IUPK extension application in 2025 and will eliminate export duties, a future margin positive .

What Went Well and What Went Wrong

• What Went Well

  • Beat on top and bottom line with improved cash generation: revenue $7.58B, diluted EPS $0.53 (adjusted $0.54), operating cash flow $2.20B . “Quarterly unit net cash costs significantly below April 2025 guidance” .
  • U.S. pricing premium and strong gold price realizations supported margins: copper realization $4.54/lb and gold realization $3,291/oz; management highlighted “favorable pricing for U.S. copper sales and global gold sales” .
  • Execution milestones: “Commenced start-up activities at the new Indonesia smelter in May 2025; expect first production of copper cathode in July 2025.” CEO: “We achieved a major milestone during the second quarter with the startup of our new large-scale copper smelter in Indonesia” .

• What Went Wrong

  • Gold volume reset from Grasberg ore grade model timing drives higher cost guidance: 2025 gold down to 1.3Moz (from 1.6Moz), with 2025 unit net cash costs raised to $1.55/lb (from $1.50/lb) as lower by-product credits flow through .
  • Indonesia production rates impacted by maintenance and lower grades: PTFI Q2 production 359M lbs Cu and 311k oz Au, down YoY; maintenance on SAG-2 expected to complete in Q3 .
  • Tariff pass-through risk on inputs: management continues to estimate potential ~5% cost impact on U.S. purchased goods via suppliers, requiring mitigation via sourcing and efficiency programs .

Financial Results

Headline results by period

Actual vs S&P Global consensus (Q2 2025)

• Values with asterisks (*) retrieved from S&P Global.

Segment/Region operating snapshot (Q2 2025)

Q2 2025 operating KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO tone on execution and technology: “We are challenging ourselves to improve efficiencies and leverage new technologies to drive better performance and grow production more quickly with lower capital intensity… startup of our new large-scale copper smelter in Indonesia” .
• U.S. cost trajectory: aiming “unit costs to trend to the $2.50 per pound range in 2027” driven by efficiency, automation, and leach initiatives .
• Smelter economics: Manyar operating cost “$0.27/lb,” net “$0.15–$0.16/lb” after recovered metal revenues; export duty (~$0.30+/lb in Q2) will go away as smelter ramps .

Q&A Highlights

• Tariffs and cost inputs: Task force managing supplier pass-throughs; potential impact “~5%” on U.S. goods; focus on alternative sourcing and efficiency offsets .
• Buybacks vs. growth: Sticking to 50% performance-based payout; premium-driven cash flow could lift returns but investment optionality (e.g., Bagdad expansion) also considered .
• Working capital: Some use in Q3 tied to Indonesia timing; expected to turn in Q4; no material FY impact expected .
• Marketing optionality: Near-term refined copper from Indonesia likely sold into Asia; flexibility retained depending on trade flows; exploring Miami smelter expansion (~30%) and U.S. scrap opportunities .

Estimates Context

• Q2 2025 vs S&P Global consensus: revenue $7.58B vs $7.19B*, adjusted EPS $0.54 vs $0.44*, EBITDA $3.20B vs $3.03B*. FCX beat across all three measures (see table above).
• Forward (S&P Global): Q3 2025 consensus revenue $6.73B* and EPS $0.41*; management’s Q3 volume mix favors gold vs April while copper/moly are lower, and consolidated unit net cash costs guided to ~$1.59/lb .
• Values with asterisks (*) retrieved from S&P Global.

Key Takeaways for Investors

• Quality beat with better costs and pricing: Q2 delivered revenue/EPS/EBITDA beats and materially lower unit costs; realized pricing tailwinds (gold and U.S. copper premium) supported margins .
• Guidance reset is mostly timing, not thesis: 2025 gold reduction stems from ore-flow timing; copper volumes intact longer-term; 2025 unit costs raised modestly to $1.55/lb .
• Tariff-driven U.S. premium is a near-term cash and narrative catalyst; each $0.10/lb premium adds $70mm to 2H25 OCF ($135mm annualized) .
• Indonesia smelter ramp is a pivotal de-risking event: eliminates export duties, supports IUPK extension, and smooths sales/production alignment over time .
• U.S. franchise leverage: sizeable optional brownfield growth (Bagdad, Lone Star) plus leach innovation scaling (targeting 300 mm lbs run-rate by YE’25) can compound premium benefits .
• Watch list for 2H: COMEX-LME spread durability, smelter ramp curve, PTFI mill maintenance completion, and any tariff/supply chain cost pass-throughs .
• Capital returns remain disciplined under the 50% payout framework with net debt ex downstream projects at ~$1.5B, preserving flexibility for growth and returns .

Notes:
- All company figures and quotes are sourced from FCX Q2 2025 8-K/press materials and the earnings call transcript as cited.
- S&P Global consensus and forward estimates are marked with asterisks (*) and were retrieved from S&P Global.