Freeport-McMoRan(FCX) - 2025 Q2 - Quarterly Results

Freeport Q2 2025 Earnings Report Executive Summary & Highlights The company reported strong Q2 2025 results driven by robust operating performance and favorable pricing Q2 2025 Key Financial and Operating Metrics | Metric | Q2 2025 Value | | :--- | :--- | | Net Income (attributable to common stock) | $772 million | | Diluted EPS | $0.53 | | Adjusted Net Income | $790 million | | Adjusted Diluted EPS | $0.54 | | Copper Sales | 1.0 billion lbs | | Gold Sales | 522 thousand oz | | Average Realized Copper Price | $4.54 / lb | | Average Unit Net Cash Costs (Copper) | $1.13 / lb | | Operating Cash Flows | $2.2 billion | - A major milestone was achieved with the start-up of the new large-scale copper smelter in Indonesia during the second quarter[3] - The company is advancing innovative copper leaching initiatives and leveraging new technologies to grow production with lower capital intensity[3][17] - During Q2 2025, FCX repurchased 1.5 million shares of common stock for $52 million[1] Consolidated Financial & Operating Performance Consolidated performance improved YoY with higher revenues and lower unit costs, benefiting from by-product credits Summary Financial Data Q2 2025 revenues grew 14.5% YoY to $7.58 billion, with net income increasing 25.3% to $772 million Summary Financial Data (in millions, except per share) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $7,582 | $6,624 | $13,310 | $12,945 | | Operating income | $2,432 | $2,049 | $3,735 | $3,683 | | Net income attributable to common stock | $772 | $616 | $1,124 | $1,089 | | Diluted net income per share | $0.53 | $0.42 | $0.77 | $0.75 | | Operating cash flows | $2,195 | $1,956 | $3,253 | $3,852 | Summary Operating Data Copper and gold production decreased YoY due to ore grades, but sales volumes for both metals increased Summary Operating Data | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Copper (M lbs) | | | | | | Production | 963 | 1,037 | 1,831 | 2,122 | | Sales | 1,016 | 931 | 1,888 | 2,039 | | Realized Price/lb | $4.54 | $4.48 | $4.48 | $4.25 | | Unit Net Cash Costs/lb | $1.13 | $1.73 | $1.56 | $1.61 | | Gold (k oz) | | | | | | Production | 317 | 443 | 604 | 992 | | Sales | 522 | 361 | 650 | 929 | | Realized Price/oz | $3,291 | $2,299 | $3,260 | $2,236 | | Molybdenum (M lbs) | | | | | | Production | 22 | 20 | 45 | 38 | | Sales | 22 | 21 | 42 | 41 | | Realized Price/lb | $21.10 | $21.72 | $21.37 | $21.06 | Consolidated Production and Sales Q2 2025 copper and gold sales exceeded guidance, with full-year 2025 copper sales projected at 3.95 billion pounds - Q2 2025 copper production was lower YoY due to reduced ore grades and operating rates, but sales were higher due to shipment timing[7] - Q2 2025 gold sales of 522 thousand ounces were above guidance, primarily due to the timing of refined gold sales[7] 2025 Full Year Sales Guidance | Metal | 2025 Full Year Guidance | | :--- | :--- | | Copper | 3.95 billion lbs | | Gold | 1.3 million oz | | Molybdenum | 82 million lbs | Consolidated Unit Net Cash Costs Q2 2025 consolidated unit net cash costs for copper were significantly below guidance due to higher by-product credits - Q2 2025 unit net cash costs of $1.13/lb were well below the $1.50/lb guidance, mainly due to higher by-product credits[9] - The average unit net cash cost for copper is projected to be $1.55 per pound for the full year 2025[10] - Cost sensitivity for H2 2025: a $100/oz change in gold price impacts costs by ~$0.02/lb[10] U.S. Copper Tariffs and Market Impact A planned 50% U.S. tariff on copper imports is expected to benefit FCX as the leading domestic supplier - A 50% tariff on U.S. copper imports is planned to be effective August 1, 2025[13] - FCX is the leading U.S. copper supplier, providing approximately 70% of total U.S. refined copper production[14] - Following the tariff announcement, the COMEX copper price premium over LME increased to approximately $1.20 per pound, benefiting FCX's U.S. sales[15] Operations Review The company is advancing growth projects across its portfolio, including leaching initiatives and major expansions Leaching and Technology Innovation Initiatives Technology-driven leaching initiatives are on track to add 300 million pounds of annual copper production by year-end 2025 - Leaching initiatives produced 52 million pounds of incremental copper in Q2 2025[17] - The company targets an annual run rate of 300 million pounds of copper from these initiatives by the end of 2025[18] - Large-scale testing of an internally developed additive to enhance copper recovery began at the Morenci operations in Q2 2025[18] United States Operations U.S. operations saw higher copper sales and lower unit costs while advancing major expansion projects at Bagdad and Safford - A potential expansion at the Bagdad operation could add 200-250 million pounds of copper production per year for an estimated capital cost of $3.5 billion[22] - Pre-feasibility studies are underway at the Safford/Lone Star district for a potential significant expansion, with studies expected to be complete in 2026[24] U.S. Operations Q2 2025 vs Q2 2024 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Copper Production (M lbs) | 336 | 298 | | Copper Sales (M lbs) | 308 | 292 | | Avg. Realized Price/lb | $4.81 | $4.63 | | Unit Net Cash Costs/lb | $3.04 | $3.19 | South America Operations South American operations saw lower production due to ore grades, while a major mill project is being evaluated at El Abra - A large sulfide resource at El Abra, Chile, could support a major mill project adding 750 million pounds of annual copper production[32][33] - Q2 2025 copper sales were lower than Q2 2024 primarily due to anticipated lower ore grades and milling rates[37] South America Operations Q2 2025 vs Q2 2024 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Copper Production (M lbs) | 268 | 298 | | Copper Sales (M lbs) | 265 | 302 | | Avg. Realized Price/lb | $4.47 | $4.39 | | Unit Net Cash Costs/lb | $2.46 | $2.46 | Indonesia Operations Indonesia operations achieved a key milestone with the start-up of its new smelter and are advancing the Kucing Liar project - The new smelter in Indonesia commenced start-up activities ahead of schedule, with first copper cathode production expected by the end of July 2025[41][42] - Development of the Kucing Liar deposit is ongoing, expected to produce over 7 billion lbs of copper and 6 million oz of gold between 2029 and 2041[47] - Consolidated sales guidance from PTFI for 2025 is revised to 1.54 billion lbs of copper and 1.3 million oz of gold[55] Indonesia Operations Q2 2025 vs Q2 2024 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Copper Production (M lbs) | 359 | 441 | | Copper Sales (M lbs) | 443 | 337 | | Gold Production (k oz) | 311 | 437 | | Gold Sales (k oz) | 518 | 356 | | Unit Net Cash Credits/lb | ($0.99) | ($0.21) | Molybdenum Mines Molybdenum mines delivered higher production and significantly lower unit net cash costs compared to the prior year - Molybdenum production increased to 9 million pounds in Q2 2025 from 7 million pounds in Q2 2024[59] - Average unit net cash costs for Molybdenum mines decreased to $14.20 per pound in Q2 2025, compared to $19.41 in Q2 2024[60] - Average unit net cash costs for the Molybdenum mines are expected to be approximately $15.50 per pound for the full year 2025[60] Financial Position, Liquidity, and Shareholder Returns The company maintains a strong financial position with $4.5 billion in cash and continues to return capital to shareholders Liquidity, Cash Flows, and Capital Expenditures FCX generated $2.2 billion in Q2 operating cash flow and projects $4.9 billion in capital expenditures for 2025 - Generated operating cash flows of $2.2 billion in Q2 2025 and $3.3 billion for the first six months of 2025[62] - Full-year 2025 operating cash flow is expected to be ~$7.0 billion, or ~$7.9 billion including a premium on U.S. copper sales[63] - Capital expenditures are expected to be approximately $4.9 billion for the full year 2025, including $2.7 billion for major mining projects[66] Cash and Debt Structure The company held $4.5 billion in consolidated cash and $9.3 billion in total debt at the end of Q2 2025 Cash Position at June 30, 2025 (in billions) | Category | Amount | | :--- | :--- | | Total consolidated cash | $4.5 | | Less: Noncontrolling interests' share | ($1.5) | | Less: Withholding taxes | ($0.2) | | Net cash available | $2.8 | Debt Summary at June 30, 2025 (in billions) | Debt Category | Amount | Weighted Avg. Interest Rate | | :--- | :--- | :--- | | Senior notes (FCX) | $5.3 | 5.0% | | Senior notes (PTFI) | $3.0 | 5.4% | | Other Debt | $0.9 | Various | | Total Debt | $9.3 | 5.2% | Financial Policy and Shareholder Returns The company declared a $0.15 per share dividend and repurchased $52 million of stock in Q2 2025 - The financial policy targets up to 50% of available cash flows for shareholder returns[69] - Declared a total cash dividend of $0.15 per share ($0.075 base + $0.075 variable) payable on August 1, 2025[71] - Repurchased 1.5 million shares for $52 million in Q2 2025, with total program purchases reaching $2.0 billion[72] Supplemental Financial Information This section provides detailed financial statements, non-GAAP reconciliations, and granular segment data Consolidated Financial Statements Financial statements show increased Q2 revenues and a robust balance sheet with $56.5 billion in total assets Consolidated Statement of Income Highlights (Q2 2025 vs Q2 2024, in millions) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $7,582 | $6,624 | | Operating Income | $2,432 | $2,049 | | Income Before Taxes | $2,391 | $2,030 | | Net Income Attributable to Common Stockholders | $772 | $616 | Consolidated Balance Sheet Highlights (June 30, 2025 vs Dec 31, 2024, in millions) | Line Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,490 | $3,923 | | Total Assets | $56,492 | $54,848 | | Total Debt (Current + Long-term) | $9,251 | $8,948 | | Total Equity | $29,996 | $28,778 | Reconciliations and Other Disclosures This section reconciles GAAP figures to non-GAAP metrics, showing a Q2 adjusted net income of $790 million - Q2 2025 GAAP net income of $772 million was adjusted for $18 million in net charges to arrive at an adjusted net income of $790 million[101] - Excluding PTFI's new downstream facilities debt, the net debt used for financial policy purposes is $1.5 billion[110] - At June 30, 2025, FCX had 245 million pounds of provisionally priced copper sales recorded at an average price of $4.49 per pound[118] Segment and Product Information Segment data highlights that Indonesia Operations were the largest contributor to Q2 operating income at $1.87 billion Operating Income by Segment (Q2 2025, in millions) | Segment | Operating Income (Loss) | | :--- | :--- | | U.S. Copper Mines | $368 | | South America Operations | $374 | | Indonesia Operations | $1,868 | | Molybdenum Mines | $25 | | Rod & Refining | $7 | | Atlantic Smelting & Refining | $13 | | Corporate, Other & Eliminations | ($223) | | FCX Total | $2,432 | Unit Net Cash Cost Reconciliation Summary (Q2 2025, per pound of copper) | Region | Site Production & Delivery | By-product Credits | Other | Unit Net Cash Cost/(Credit) | | :--- | :--- | :--- | :--- | :--- | | U.S. Copper Mines | $3.44 | ($0.55) | $0.15 | $3.04 | | South America Ops | $2.76 | ($0.37) | $0.07 | $2.46 | | Indonesia Ops | $2.17 | ($3.98) | $0.82 | ($0.99) |