FCX's Unit Net Cash Costs Fall in Q2: Can It Sustain the Momentum?

Freeport-McMoRan Inc. FCX saw a notable reduction in its average unit net cash cost per pound of copper in the second quarter of 2025 to just $1.13, a sharp improvement from $1.73 a year earlier and well below its guidance of $1.50. The decline was fueled by operational efficiencies, higher gold credits and an uptick in copper sales volumes. Lower costs contributed to stronger profit margins in the quarter. 

Freeport's outlook for the third quarter, however, suggests higher costs on a sequential basis. It expects unit net cash costs to rise to $1.59 per pound in the third quarter, while still projecting a full-year average of roughly $1.55. Lower expected sales volumes are likely to impact costs in the third quarter. The potential impacts of tariffs may lead to further upside to the projected third-quarter costs. FCX estimates that the tariffs could potentially increase the cost of goods it purchases in the United States by roughly 5%. Higher costs are likely to weigh on the company's margins.

Among FCX’s peers, Southern Copper Corporation SCCO also reported lower unit costs in the second quarter. Southern Copper’s operating cash cost per pound of copper, net of by-product revenue credits, was $0.63, marking a 17% decline from $0.76 per pound reported in the prior-year quarter. Southern Copper’s operating cash cost per pound of copper also declined roughly 24% year over year in the first six months of 2025.

BHP Group Limited BHP saw lower unit costs across its copper operations in fiscal 2025. BHP expects the unit cost for Escondida to be in the band of $1.20-$1.50 per pound for fiscal 2026. BHP also expects Copper South Australia’s unit cost to be between $1 and $1.50 per pound. Unit costs at Spence are expected to be between $2.10 and $2.40 per pound for fiscal 2026.

The Zacks Rundown for FCX

Shares of Freeport-McMoRan are up 9.6% year to date against the Zacks Mining - Non Ferrous industry’s rise of 3.2%.

From a valuation standpoint, FCX is currently trading at a forward 12-month earnings multiple of 19.76, a modest 1% premium to the industry average of 19.49X. It carries a Value Score of B.

The Zacks Consensus Estimate for FCX’s 2025 and 2026 earnings implies a year-over-year rise of 18.2% and 33%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.

FCX stock currently carries a Zacks Rank #3 (Hold). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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