Freeport-McMoRan Q3 2026: EPS up 76% to $0.81 as $6.54 copper offset 23% lower sales

Freeport-McMoRan earned $1.17 billion for its own shareholders in the third quarter of 2026, up 74% from $674 million a year earlier, or $0.81 a diluted share against $0.46. It did that while selling 23% less copper. The average price Freeport got for its copper was $6.54 a pound, 40% more than a year ago, and that lifted revenue 8% to $7.55 billion. The Grasberg mine in Indonesia is still recovering from the September 2025 mud rush (a flood of wet material into the underground mine), so the profit came mostly from Freeport's wholly owned US mines and its South American mines, which roughly doubled their operating income.

This report is based on the earnings press release (Exhibit 99.1 to an 8-K filed October 27, 2026). The full 10-Q has not been filed yet, so some detail the 10-Q usually adds (full quarterly cash flow statement, management's discussion of each line item) is not available here.

Key figures

*Unit net cash cost is the cash cost of producing a pound of copper after subtracting what the company earns from gold, molybdenum and silver that come out of the same ore ("by-product credits"). It excludes the idle-facility and restoration costs tied to the Grasberg incident ($244 million this quarter). Operating margin is operating income as a share of revenue: what is left after running the mines, before interest and tax.

Molybdenum, Freeport's third metal (used to harden steel), sold 22 million pounds at $32.46 a pound, compared with 19 million pounds at $24.07.

Where the profit came from

Operating income by division tells the story of the quarter:

US mines. Copper sales were almost flat at 333 million pounds (339 million a year ago) and sold at $6.55 a pound against $4.92. The release says operations were hurt by "an increased frequency of extreme weather conditions": operating rates were 10% above last year but 3% to 5% below plan and below Q2. Unit net cash cost rose slightly to $3.16 a pound from $3.11, as lower productivity and higher energy costs outweighed higher molybdenum credits.

South America. Sales fell to 263 million pounds from 278 million on lower ore grades and shipment timing, but the price ($6.56 against $4.60) doubled operating income. Unit cost rose to $2.39 from $2.30, partly from higher profit-sharing payments to Cerro Verde employees, a side effect of the higher prices.

Indonesia. PTFI, the Indonesian company of which Freeport owns 48.76%, sold 153 million pounds of copper and 98,000 ounces of gold, against 360 million pounds and 332,000 ounces a year ago. Mill throughput averaged 141,000 metric tons of ore a day, 67% of capacity, including 70,000 tons a day from the Grasberg Block Cave. Idle-facility, recovery and restoration costs (part of operating cost written off straight away while the mine runs below normal) were $244 million, or $1.59 per pound of PTFI copper. PTFI's own new smelter restarted in late August.

Why shareholder profit grew four times faster than operating income

Pre-tax income rose 19% to $2.29 billion. Two lines below it moved the other way:

• Tax fell even though profit rose. The income tax charge was $610 million against $669 million, an effective rate of 27% against 35%. US pre-tax income jumped to $678 million from $155 million and is taxed at 11% (mainly the corporate minimum tax), while Indonesia, taxed at 30% this quarter, earned less. Indonesia's rate was also lowered by newly confirmed tax benefits for the smelter, recognized in Q3 for all of 2025 and the first nine months of 2026 at once; Freeport counts the 2025 part, $14 million after partners, as a one-off and excludes it from adjusted earnings.
• Partners took a smaller share. Net income attributable to noncontrolling interests (the profits that belong to Freeport's partners in PTFI, Cerro Verde and El Abra) fell to $514 million, 22% of pre-tax income, from $573 million, 30%. Indonesia's partners received $239 million against $436 million.

The same mix effect drove Q2. It is real, not an accounting choice: profit earned in a wholly owned, low-tax mine belongs more fully to Freeport's shareholders. But it will partly reverse as Grasberg recovers. Freeport expects partners' share of full-year 2026 pre-tax income to be about 24% and its full-year effective tax rate about 30%, both above Q3's levels.

What the headline numbers hide

• Gold sales slipped into Q4. Gold production was 234,000 ounces but sales only 105,000, against Freeport's July estimate of 160,000. About 60,000 ounces of refined gold in Indonesia were deferred to Q4. At Q3's realized gold price that is roughly $0.26 billion of revenue (our arithmetic) that moves into the next quarter. It also raised unit cost, because fewer gold sales mean smaller by-product credits: unit net cash cost came in at $2.07, 4% above the $2.00 Freeport guided in July. Q4 guidance assumes 300,000 ounces of gold sales and an export route for them that is not settled: Indonesian rules impose a 10% duty on refined gold exports, which Freeport says conflicts with its mining licence, and it is seeking clarity from the government.
• One-offs work against the GAAP figure, not for it. GAAP net income includes $101 million ($0.07 a share) of after-tax net charges, mainly Grasberg idle-facility and restoration costs, compared with $48 million ($0.04) a year ago. Adjusted EPS of $0.88 grew 76%, the same as GAAP EPS. Note that the excluded idle-facility costs recur every quarter of the ramp-up (expected through 2027), so adjusted EPS is a generous view. Smaller favorable items: $17 million from repricing earlier copper sales and $8 million from deferred intercompany profit, together about $0.02 a share.
• Cash conversion is fine. Operating cash flow of $1.98 billion exceeded consolidated net income of $1.69 billion, even after $0.4 billion of working capital use. Most of that went into inventory: product inventories rose to $3.77 billion from $3.33 billion at the end of 2025, consistent with metal sitting at the Indonesian smelters (production exceeded sales by about 11% in Q3). Trade receivables fell over the same period.
• Buybacks did not drive EPS. Freeport bought 1.4 million shares for $102 million and paid $216 million of common dividends in Q3 (derived from the nine-month figure of $650 million less the first half's $434 million in the Q2 10-Q). Diluted shares were 1,442 million against 1,443 million, so the share count explains almost none of the EPS growth.

On balance the quarter is clean: GAAP and adjusted EPS both rose 76%, one-off items cost more this year than last, and the jump from 19% operating-income growth to 76% EPS growth comes from where the profit was earned, not from accounting items. The Indonesian tax catch-up is small next to it.

Takeaway: Freeport is currently a copper-price story told through its US and Peruvian mines. Those two divisions earned $1.88 billion, more than double last year, while Grasberg earned half. The low tax rate and small partner share that turned 19% operating growth into 76% EPS growth will fade as Grasberg returns. From here, EPS growth has to come from Grasberg's volumes, which are much larger.

Did last time's read hold up?

Our Q2 report named three things to watch. Grasberg reaching about 65% of capacity: it did, with mill throughput at 67%. PTFI's smelter restart: it restarted in late August, but sales still trailed production, and the gold timing problem shows the smelters have not yet caught up. The 2027 refined-copper tariff decision: the release gives no update. The Q3 guidance from July was mostly met: copper sales of 749 million pounds against about 750 million, and idle costs of $244 million against about $0.3 billion. Gold sales (105,000 against 160,000 ounces) and unit cost ($2.07 against $2.00) missed. One target slipped: our Q2 report said Freeport was aiming for an annual 300 million pounds from its leaching initiatives (new ways to recover copper from low-grade stockpiles) by the end of 2026. The release now puts 300 million pounds "in 2027", from a current run rate of about 220 million.

Guidance and outlook

Changes from July:

• 2026 sales: about 3.0 billion pounds of copper (was 3.06 billion), 649,000 ounces of gold (was 654,000) and 93 million pounds of molybdenum. Q4 alone: 875 million pounds of copper, 300,000 ounces of gold, 22 million pounds of molybdenum.
• Unit net cash cost: $1.90 a pound for 2026, unchanged, with $1.68 in Q4.
• Operating cash flow: about $8.5 billion for 2026 (was $8.3 billion), now assuming Q4 prices of $6.50 copper, $4,000 gold and $32 molybdenum. Each 10-cent change in the Q4 copper price moves it by about $75 million.
• Capex: about $4.4 billion (was $4.3 billion), including $3.0 billion for major projects.
• Grasberg: 80% of capacity by mid-2027, close to full by the end of 2027. A decision on the roughly $4.5 billion Bagdad expansion in Arizona is expected in Q4 2026.

Balance sheet: $9.4 billion of debt and $4.3 billion of cash at September 30. Net debt was $1.8 billion excluding $3.2 billion of smelter project debt, down from $2.1 billion at June 30 and below the company's $3–4 billion target.

Our view: Q4 should be Freeport's strongest quarter of the year on volume: guidance implies 17% more copper sold than Q3 and nearly three times the gold, at a lower unit cost. Two risks stand out. The gold sales depend on getting refined gold out of Indonesia, where the export-duty question is open. And US mine productivity was below plan in Q3 because of weather. Copper prices are close to Freeport's planning price (the LME settled at $6.58 on October 26, against the $6.50 assumption), so the cash flow guide is not relying on a further rally.