Core Viewpoint - Freeport-McMoRan Inc. (FCX) is expected to report its fourth-quarter 2025 results on January 22, with anticipated impacts from higher unit costs and weaker volumes, although favorable copper prices may provide some benefits [1][7]. Earnings Estimates - The Zacks Consensus Estimate for fourth-quarter earnings is 28 cents per share, reflecting a 9.7% year-over-year decline, while revenues are estimated at $5.05 billion, indicating an 11.7% decline year-over-year [2]. - FCX has beaten the Zacks Consensus Estimate for earnings in three of the last four quarters, with an average earnings surprise of 17.1% [3][4]. Factors Influencing Q4 Results - FCX is expected to benefit from favorable copper prices, which remained above $5 per pound in Q4 2025 and gained approximately 18% during the quarter [8]. - The average realized copper price for FCX is estimated at $4.75 per pound, representing a year-over-year increase of 14.5% [10]. - However, lower sales volumes due to the Grasberg mine incident are projected to negatively impact performance, with expected copper sales volumes of 635 million pounds, reflecting a 35% sequential and 36% year-over-year decline [11]. - Higher unit cash costs are also anticipated to affect performance, with an increase in average unit net cash cost per pound of copper from $1.13 to $1.40, marking a 24% rise [12]. Stock Performance and Valuation - FCX shares have increased by 45.7% over the past year, underperforming the Zacks Mining - Non Ferrous industry's 62.4% rise and the S&P 500's 17.3% increase [13]. - The company is currently trading at a forward 12-month earnings multiple of 25.3X, slightly above the peer group average of 25.02X [15]. Investment Thesis - FCX is well-positioned with high-quality copper assets and is focused on strong execution and organic growth opportunities, supported by robust financial health and substantial cash flows [16]. - The company is expected to benefit from progress in exploration activities that will enhance production capacity [16]. - Despite the positives, challenges from higher costs and weaker sales volume outlook due to the Grasberg mine incident warrant caution [19].

Core Insights - Freeport-McMoRan Inc. (FCX) and Southern Copper Corporation (SCCO) are major players in the copper mining industry, facing challenges from fluctuating copper prices and global economic uncertainties [1] - Copper prices have shown volatility throughout the year, influenced by global economic conditions and trade tensions, with prices fluctuating between approximately $4.1 and $5.96 per pound [2][3] Freeport-McMoRan Inc. (FCX) - FCX is focused on high-quality copper assets and organic growth opportunities, with significant expansions at Cerro Verde in Peru and potential projects at El Abra in Chile [5][6] - The company has a strong liquidity position, generating operating cash flows of around $1.7 billion in Q3 2025, with $4.3 billion in cash and equivalents [8] - FCX's net debt stands at $1.7 billion, below its target range, and it has a policy of distributing 50% of available cash to shareholders [9][10] - However, FCX faces rising costs, with average unit net cash costs increasing to $1.40 per pound in Q3 2025, and projected to rise to $2.47 per pound in Q4 2025 [11][12] - Copper sales volumes fell approximately 6% year-over-year in Q3 2025, primarily due to operational suspensions at the Grasberg mine [13][14] Southern Copper Corporation (SCCO) - SCCO has a robust pipeline of copper projects, with over $15 billion earmarked for capital investments, particularly in Peru [15][16] - The Michiquillay project is expected to produce 225,000 tons of copper annually, with production starting by 2032 [17] - SCCO generated net cash from operating activities of $4.42 billion in 2024, reflecting a 24% increase from the previous year, and $1.56 billion in Q3 2025 [19] - The company offers a dividend yield of 2.9% with a payout ratio of 67% and a five-year annualized dividend growth rate of approximately 0.6% [19] Comparative Analysis - FCX is trading at a forward 12-month earnings multiple of 23.18X, while SCCO is at 22.57X, both above their five-year medians [21][22] - Year-to-date, FCX stock has gained 7.9%, while SCCO stock has increased 41.7% [23] - FCX's return on equity is 7.8%, significantly lower than SCCO's 38.8%, indicating SCCO's more efficient use of shareholder funds [27] - The consensus estimates for SCCO suggest year-over-year growth in sales and EPS, while FCX's estimates imply a decline in sales and modest EPS growth [25][29] Investment Outlook - Both companies are advancing their growth projects amid a volatile copper pricing environment, with FCX focusing on expansion activities and SCCO committed to low-cost production [31][32] - SCCO's higher earnings growth projections and effective utilization of shareholder funds suggest it may offer better investment prospects in the current market [32] - FCX currently holds a Zacks Rank of 3 (Hold), while SCCO has a Zacks Rank of 1 (Strong Buy) [33]