Freeport-McMoRan's Q2 2026 net income attributable to common stock rose 27% to $984M ($0.68/share) on 36% higher realized copper prices, even as revenue fell 7% to $7.03B and copper sales dropped 30% during Grasberg's post-mud-rush ramp-up.
Revenue
$7.0B
-7.3% YoY
Net income
$984M
+27.5% YoY
Diluted EPS
$0.68
+28.3% YoY
Operating margin
28.5%
Overview
Freeport-McMoRan earned $984 million for its own shareholders in the second quarter of 2026, up 27% from $772 million a year earlier, even though revenue fell 7% to $7.03 billion and the company sold 30% less copper. Two things made that possible. First, metal prices were far higher: Freeport's average realized copper price was $6.17 a pound, up 36%, and gold was $4,520 an ounce, up 37%. Second, where the profit was earned changed. The Grasberg mine in Indonesia is still ramping back up after the September 2025 mud rush (a flood of wet material into the underground mine). Much of Freeport's profit there is shared with partners and taxed heavily. The fully owned US mines, which pay little tax this year, made up more of the total.
In short, a weaker quarter for the business as a whole became a stronger one for shareholders. Operating income, the profit from running the mines before interest and tax, fell 18% to $2.00 billion. But the share paid to minority partners roughly halved, and the tax rate dropped.
Key figures
Metric
Q2 2026
Q2 2025
YoY Change
Revenue
$7,029M
$7,582M
-7.3%
Operating income
$2,003M
$2,432M
-17.6%
Operating margin
28.5%
32.1%
-3.6 pts
Net income attributable to common stock
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*Unit net cash cost is the cash cost of producing a pound of copper after subtracting what the company earns from the gold, molybdenum and silver that come out of the same ore ("by-product credits"). The 2026 figure excludes $0.40 a pound of idle-facility and restoration costs tied to the Grasberg incident. Including them, the cost would be about $2.37.
First half of 2026: revenue was $13.26 billion, almost flat against $13.31 billion. Net income attributable to common stock rose 66% to $1.87 billion from $1.12 billion, and diluted EPS rose to $1.29 from $0.77. The first half includes a $699 million pre-tax gain from Freeport's insurance settlement for the mud rush, booked in Q1. After tax and partners' shares, that gain was about $0.2 billion. The cash arrived in April 2026.
Grasberg: why volumes fell and costs rose
Indonesia is where the quarter was weakest. PTFI, the Indonesian operating company, of which Freeport owns 48.76%, sold 153 million pounds of copper and 118,000 ounces of gold. A year earlier it sold 443 million pounds and 518,000 ounces. Ore mined from the Grasberg Block Cave, the biggest of its three underground mines, averaged 53,000 metric tons a day, compared with 114,500 a year earlier. Copper ore grade (the share of copper in the rock) fell from 1.15% to 0.91%.
The 10-Q describes the recovery as on plan. PTFI restarted Production Blocks 2 and 3 at the end of March 2026 and "achieved its planned operating rates" for the quarter. Work continues toward a later restart of Production Block 1S. Management expects overall production to run at about 65% of capacity in the second half of 2026 and 80% by mid-2027, approaching full capacity by the end of 2027.
The incident shows up in the income statement in two ways:
Idle-facility costs. While the mine is running below normal, part of PTFI's operating cost is written off straight away as "idle facility and restoration costs" rather than counted in inventory. Those costs were $284 million in Q2 and $690 million in the first half, plus $79 million of depreciation in Q2. Freeport expects about $1.2 billion of these costs for 2026, including $0.3 billion in Q3. Net of tax and partners' shares, the incident-related charges cut Q2 earnings by $96 million, or $0.06 a share.
Lower Indonesian profit. Indonesia's operating income fell to $499 million from $1.87 billion. Even excluding idle costs, PTFI's unit net cash credit (gold income more than covers the cost of producing copper, so the "cost" is negative) narrowed to $0.81 a pound from $0.99. The 10-Q attributes this mainly to lower copper volumes.
Sales also trail production because of timing. PTFI now sends its concentrate (crushed, partly processed ore) to its own smelters instead of exporting it. Sales are recorded only after the metal is refined, so Q2 production of 205 million pounds exceeded sales of 153 million. For 2026, Freeport expects production to exceed sales by about 100 million pounds of copper and 50,000 ounces of gold, which will sit as inventory at the smelters.
Indonesia smelters and export rules
PTFI's copper-concentrate export licence expired on September 16, 2025, and PTFI now sells only refined metal. One effect is on the comparison: Q2 2025 revenue was reduced by $146 million of 7.5% export duties, and there were none this quarter. Royalties also fell to $60 million from $135 million because PTFI sold less metal.
With less concentrate coming from the mine, both Indonesian smelters had to cut back after the incident. PT Smelting (66% owned by PTFI) restarted in late December 2025 and was running at capacity by the end of Q2. PTFI's own new smelter is expected to restart in the second half of 2026 at reduced rates, depending on how much concentrate is available. Indonesian rules also require 100% of PTFI's export proceeds to be held in Indonesian banks for 12 months, though the funds can be used for dividends, taxes and other business needs.
In February 2026, Freeport and PTFI signed a memorandum of understanding with Indonesia's government to extend operating rights beyond 2041. Under it, Freeport keeps its 48.76% stake through 2041 and holds about 37% from 2042. PTFI applied for the licence extension in June 2026, and the extension is not final.
US mines: the quarter's profit engine
US copper mines' operating income more than doubled to $834 million from $368 million. Copper sales were almost unchanged at 312 million pounds, compared with 308 million. The gain came from price: US revenue averaged $6.25 a pound, compared with $4.81. US sales are generally priced off COMEX, the US copper exchange, which averaged $6.16 in Q2. That was higher than the $6.05 LME average (the London exchange that sets prices for the South American and Indonesian sales). Unit net cash cost fell to $2.94 a pound from $3.04. The 10-Q attributes the decline mainly to higher by-product credits (molybdenum realized $28.75 a pound, compared with $21.10), partly offset by higher costs for supplies, diesel and other consumables.
On tariffs: since August 2025, the US has charged a 50% Section 232 tariff on imports of semi-finished copper products. Refined copper, concentrates and scrap are exempt. The government has said it will reconsider a refined-copper tariff of 15% from January 2027, rising to 30% in 2028, and that review is still open. A separate rule would require 25% of US-produced cathode and concentrate to be sold in the US from 2027. Because Freeport supplies about 70% of US refined copper and sells most of it at home, it does not expect that rule to hurt its business.
Leaching initiatives (new ways to recover copper from low-grade ore stockpiles) added 47 million pounds in Q2. Freeport is targeting an annual rate of 300 million pounds by the end of 2026. The Bagdad expansion in Arizona, which would add 200–250 million pounds a year, now has an estimated capital cost of about $4.5 billion, roughly 30% above the 2023 estimate. An investment decision is still expected in the second half of 2026.
South America and Cerro Verde
South American operating income rose to $840 million from $374 million, and Cerro Verde (Peru) alone rose to $736 million from $340 million. Higher prices did this despite lower volumes. Copper sales fell to 245 million pounds from 265 million because of lower leach production and lower-grade stockpile ore, which the company attributes to mine sequencing. Unit net cash cost was roughly flat at $2.48 a pound, compared with $2.46. In May 2026, Freeport paid $107 million for 2.0 million Cerro Verde shares, raising its stake to 55.66% from 55.08%.
Where the profit went: partners and tax
Because PTFI earned much less, net income attributable to noncontrolling interests (the share of profits belonging to Freeport's partners in PTFI, Cerro Verde and El Abra) fell to $407 million from $775 million. Indonesia's share fell to $175 million from $648 million, while Cerro Verde's rose to $214 million. The income tax charge fell to $544 million from $850 million, an effective rate of about 28% compared with 36%. For the first half, the rate was 6% in the US, compared with 35% in Indonesia and 40% in Peru. As profit moved from Indonesia to the US, more of each dollar of operating income reached Freeport's shareholders.
Takeaway: Freeport's shareholder profit rose even though the mining business earned less. Operating income fell 18%, but net income attributable to common stock rose 27% because profit shifted from partner-shared, heavily taxed Grasberg to wholly owned US mines paying about 6% tax. As Grasberg recovers, that mix will partly reverse. Consolidated earnings should grow, but partners and Indonesian taxes will again take a bigger share of each dollar.
Balance sheet, cash returns and capex
Debt: $9.39 billion of total debt and $4.08 billion of cash at June 30. Net debt was $2.1 billion excluding $3.2 billion of project debt for PTFI's smelters, below the company's $3–4 billion target range.
Dividends: $0.15 a share declared on June 24 ($0.075 base plus $0.075 variable), paid August 3. Freeport also bought back 3.4 million shares for $203 million in the first half.
Capex: $1.10 billion in Q2 and $2.08 billion in the first half. Indonesia accounted for $516 million in Q2. The 2026 plan is $4.3 billion: $3.0 billion for major projects, including Grasberg underground development and Kucing Liar, and $1.3 billion for sustaining capital (spending to keep existing operations running). The plan excludes the Bagdad expansion.
Operating cash flow: $2.05 billion in Q2, after using $596 million for working capital, including tax payments.
Guidance and outlook
For full-year 2026, management expects sales of about 3.06 billion pounds of copper, 654,000 ounces of gold and 93 million pounds of molybdenum. For Q3, it expects about 750 million pounds of copper and 160,000 ounces of gold. It expects unit net cash cost to average $1.90 a pound for 2026, including $2.00 in Q3, excluding idle costs. It also expects $8.3 billion of operating cash flow, assuming second-half prices of $6.00 a pound for copper, $4,000 an ounce for gold and $30 a pound for molybdenum. Each 10-cent change in the copper price moves that figure by about $150 million.
Our view: the second half should be stronger on volume. Q3 copper sales guidance is about 6% above Q2's 710 million pounds, and copper traded above the $6.00 planning price after the quarter (COMEX reached a record $6.70 on August 5). Three things to watch. Grasberg must actually reach 65% capacity. The restart of PTFI's smelter will decide how quickly production turns into sales. And the refined-copper tariff decision for 2027 would affect the COMEX premium Freeport's US mines currently earn. Freeport also warns that the Middle East conflict is raising energy and freight costs.