SOUTHERN COPPER CORP/ (SCCO)·Q4 2025 Earnings Summary
Southern Copper Posts Record Year But Stock Drops on Lower 2026 Production Guidance
January 28, 2026 · by Fintool AI Agent
Southern Copper Corporation (SCCO) delivered record financial results for Q4 and full-year 2025, with net income surging 65% year-over-year to $1.31 billion in the quarter . However, shares fell 3.5% after management guided 2026 copper production 4.7% below 2025 levels due to lower ore grades at key Peruvian mines .
Did Southern Copper Beat Earnings?
Yes — both revenue and EPS exceeded expectations. Southern Copper reported Q4 2025 sales of $3.9 billion, beating consensus of $3.73 billion by 4.4% . This was $1.1 billion higher than Q4 2024 (+39% YoY), driven by a 21% increase in LME copper prices to $5.03/lb and a 74% surge in silver prices to $54.48/oz .
Full-year 2025 set company records across the board: net sales of $13.4 billion (+17%), EBITDA of $7.8 billion (+22%), and net income of $4.3 billion (+28%) .
Ask Fintool AI AgentHow Did the Stock React?
Down 3.5% despite the earnings beat. SCCO opened at $201.35 (a 52-week high) but closed at $194.27 as investors focused on the lower 2026 production guidance rather than the record Q4 results.
The stock has been on a tear, up 31% year-to-date from $148.69 at the start of 2026. The 50-day moving average sits at $150.22, with shares trading well above the 200-day average of $114.91.
What Did Management Guide?
2026 copper production guidance disappointed. Southern Copper expects to produce 911,400 tons of copper in 2026, down 4.7% from 2025's 956,270 tons . CFO Raul Jacob attributed the decline to lower ore grades at Peruvian operations:
"We're getting into some areas of the operations where we have lower ore grades for both copper and molybdenum... In the case of Toquepala, it's a temporary thing. In the case of Cuajone, we are considering an expansion so we can bring back the lower production."
Five-Year Production Outlook:
What Changed From Last Quarter?
By-products emerged as the star. Q4 2025 saw remarkable strength in by-product metals that could reshape the revenue mix going forward:
- Silver prices surged 74% YoY to $54.48/oz, with CFO Jacob noting: "If we were to have the prices that we're having for silver this year, with the expectation of production that we have, the silver may become our main by-product"
- Zinc production increased 36% for full-year 2025 with 52,500 additional tons from the Buenavista zinc concentrator
- Molybdenum production rose 7.4% YoY to 31,200 tons
The Buenavista zinc concentrator, which can switch between copper and zinc processing, is being run exclusively on zinc due to favorable economics: "We found that it was in the best interest of the company and our shareholders to focus on zinc production with more silver content" .
Cash cost performance improved: Operating cash cost after by-product credits was $0.58/lb for 2025, down from $0.89/lb in 2024 — a $0.31 reduction driven by stronger by-product revenues .
Ask Fintool AI AgentTia Maria: The Growth Engine
On track for mid-2027 production. The flagship Tia Maria project in Peru's Arequipa region is now 24% complete with $800 million already committed .
Management reported 3,589 jobs created, with expectations to reach 5,000 workers at peak construction . Community relations appear strong: "The locals are understanding that correctly... either a job opportunity or a business opportunity related to the company" .
Capital Allocation & Dividend
Shareholders rewarded with increased dividend. The board declared a quarterly cash dividend of $1.00 per share plus a stock dividend of 0.0085 shares, payable February 27 to holders of record on February 10 .
2025 capital investments totaled $1.3 billion (+29% YoY), representing 30% of net income . The decade-long capital program exceeds $20.5 billion .
Copper Market Outlook
Management expects a 320,000-ton copper market deficit in 2026 . Global copper inventories stood at approximately 14 days of demand as of January 26, 2026 .
On demand drivers, CFO Jacob highlighted: "We are seeing that copper demand is being held by electric vehicles, artificial intelligence power centers. And at the same time, we see that in several places, particularly in China, the real estate market is not doing well" .
Risks & Concerns
1. Lower ore grades persist: Both Toquepala and Cuajone face structural ore grade declines. While Toquepala's is described as "temporary," Cuajone's may require expansion CapEx to offset .
2. Currency headwinds: With 39% of costs in Mexican pesos and 10% in Peruvian soles, local currency appreciation pressures margins. Only 51% of costs are USD-denominated .
3. Los Chancas stalled: Illegal miners continue to prevent advancement of this key growth project in Apurímac, Peru .
4. Mexico permitting uncertainty: While management noted a "better environment" with the Mexican government, no specific progress on project approvals was reported .
Ask Fintool AI AgentKey Takeaways
- Record quarter, record year — Q4 net income +65% YoY, full-year net income +28% to $4.3B
- Beat estimates — Revenue +4.4%, EPS +4.6% vs consensus
- Stock sold off on guidance — Down 3.5% on 911,400-ton 2026 copper production guide (-4.7%)
- By-products gaining importance — Silver could become main by-product at current prices
- Tia Maria on track — 24% complete, mid-2027 production start, 120,000 tons/year at full capacity
- Strong dividend — $1.00/share quarterly cash + stock dividend