Freeport-McMoRan Beats On Copper Prices And Grasberg Recovery, But Volume Trims And A Rising 2027 Capex Bill Erode The Outlook

Freeport-McMoRan delivered a clean third-quarter beat, but the more important story is a growing gap between what the quarter showed and what management now expects. The company reported earnings of $0.88 per share, ahead of the $0.80 consensus and the $0.85 Earnings Whisper number, a 3.5% surprise. Revenue of $7.546 billion beat the $7.09 billion consensus by 6.4%. Earnings grew 76.0% year over year, while revenue rose 8.2%. Net income up more than 80% year over year compares with roughly 65% growth in the first half, so bottom-line momentum accelerated. Even so, the forward numbers moved the wrong way: copper volumes were trimmed, 2027 capital spending rose for the second straight quarter, and modeled earnings power slipped again. That is the central tension.

The beat came largely from price and recovery rather than a structural improvement in costs. LME copper was about $6.58 per pound at the time of the call, up from $6.30 at the July call. Copper sales have now risen for three consecutive quarters. Grasberg reached 67% of capacity, slightly ahead of the roughly 65% second-half target, and both Indonesian smelters are now running. U.S. operating income more than doubled. The 2026 unit net cash cost guide held at $1.90 per pound, which is better than the $1.95 set early in the year but well above the $1.75 reported in the fourth quarter of 2025. The press release itself was a pointer to the full document, so the operating detail here comes from the call.

The call reads like two separate presentations. Management's tone was more confident and growth-oriented. It reaffirmed 80% Grasberg capacity by mid-2027 and near-full operations by the end of 2027. It also laid out an explicit volume path from 3.0 billion pounds in 2026 to 3.7 billion in 2027 and more than 4 billion in 2028, without new capital. Beneath that ambition, the near-term numbers softened:

• **Volumes:** 2026 copper sales guidance was cut about 2% and 2027 about 2.5%, citing U.S. weather, slope management at El Abra and mine plan updates.
• **Capex:** The 2027 budget rose to $5.2 billion, up from $4.8 billion in July and $4.5 billion in the first quarter.
• **Costs:** Energy costs are running about $500 million above 2025 levels, and U.S. site costs rose to roughly $3.80 per pound from about $3.65. The $2.50 per pound U.S. target is effectively on hold.
• **Earnings power:** Modeled 2027-28 EBITDA at $5 copper slipped to about $12 billion, from roughly $13 billion in July and $14 billion in the first quarter.

That third consecutive step down in modeled earnings power is the detail bears will emphasize.

The catalyst list is real but back-end loaded:

• **Gen-2 leach additive:** Lab results show more than four times the incremental recoveries of Gen-1, with field deployment slated for 2027. However, the leach program has already slipped. The 300 million pound run-rate target moved from year-end 2026 into 2027, against about 200 million pounds today.
• **Baghdad 2X expansion:** A final investment decision is expected this quarter at an unchanged $4.5 billion, adding 200-250 million pounds of copper per year. That cost estimate is up from $3.5 billion in 2023, a reminder of the capital inflation management flagged.
• **Execution risks:** Kucing Liar development is behind schedule, some Grasberg mud-mitigation work slipped to 2028, and El Niño dry conditions are constraining mill water. The U.S. weather problems have persisted into the fourth quarter.
• **Near-term support:** Fourth-quarter guidance calls for copper sales up 17% sequentially and gold roughly tripling. Shareholder returns total about $1 billion year to date, including $300 million of buybacks. Management also signaled openness to M&A alongside organic growth.

Investors appeared to sense the mixed setup heading in. Earnings Whispers sentiment remained positive but weakened, falling from 0.148 at the July report to 0.058. The stock price tells a similar story. Shares rallied to a 52-week high of $80.24 in late August, then gave back most of that gain. As of the pre-report snapshot, they traded at $65.16, 18.8% below that peak and just 4.0% above the post-July opening price. That leaves the stock sitting almost exactly on its 200-day moving average of $65.03 and roughly mid-range between the $58.19 July low and the August high. Sequential growth and momentum trend readings are positive, while AVWAP remains negative, consistent with a stock that has lost its upside thrust without breaking down.

The bottom line is that Freeport's third quarter was better than expected, driven by strong copper prices, a Grasberg ramp running slightly ahead of plan and sharply accelerating profit growth. The forward picture, however, deteriorated at the margin through lower volumes, higher capex, cost inflation and reduced modeled EBITDA. The long-dated growth story remains credible, but investors are being asked to look further out while near-term targets keep slipping. With sentiment cooling and the stock pinned at its 200-day average well below its summer high, the market appears to be weighing those same trade-offs.

Read our earnings preview for Freeport-McMoRan Inc.: https://www.earningswhispers.com/article/FCX/20695

This earnings review was originally published on Earnings Whispers.

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