Freeport-McMoRan (FCX) Q2 2026: 47% Less Went to Partners
Copper set an all-time high weeks after this quarter closed — the filing records the COMEX settlement price closing at $6.56 per pound on August 6, 2026 — and Freeport-McMoRan's profit attributable to shareholders rose 27.5% to $984 million. Consolidated net income did not rise. It fell 10.1%, from $1,547 million to $1,391 million. The entire gap sits in one line: profit allocated to noncontrolling interests dropped $368 million, from $775 million to $407 million, and that $368 million is larger than the $212 million increase shareholders received. For a company that consolidates a mine it owns less than half of, the arithmetic matters more than usual — the Grasberg shutdown hurt FCX's partners more than it hurt FCX.
Copper mining is cyclical, so a single quarter proves little on its own. The longer view is that FCX's annual revenue has climbed from $14.2 billion in 2020 to $25.9 billion in 2025, while full-year operating income spiked to $8.4 billion in 2021, stepped down to $7.0 billion in 2022, and has held a narrow $6.2–6.9 billion band for three straight years since — $6.2 billion in 2023, $6.9 billion in 2024 and $6.5 billion in 2025 (SEC XBRL, FY 10-K basis). The unusual feature of 2026 is not the level. It is that the commodity cycle and the company's own operating cycle have come apart.
1. Balance Sheet — Customers Paid Down, the Mine Stocked Up
The balance sheet grew only 2.7% in six months, and almost none of that growth came from operations. Total assets rose from $58,167 million to $59,727 million. The interesting movement is inside working capital, where cash came in from customers while inventory and supplies went the other way.
Start with the second row below. Receivables fell far more than sales did.
| Item | Dec 31, 2025 ($M) | Jun 30, 2026 ($M) | Change % |
|---|---|---|---|
| Cash and cash equivalents | 3,824 | 4,080 | +6.7 |
| Trade accounts receivable | 977 | 716 | -26.7 |
| Inventories — product | 3,332 | 3,363 | +0.9 |
| Inventories — materials and supplies, net | 2,738 | 2,924 | +6.8 |
| Mill and leach stockpiles (current) | 1,423 | 1,577 | +10.8 |
| Property, plant, equipment and mine development, net | 40,736 | 41,705 | +2.4 |
| Long-term tax receivables | 810 | 1,066 | +31.6 |
| Total assets | 58,167 | 59,727 | +2.7 |
1-1. Receivables fell 26.7% while revenue barely moved
Year over year, first-half revenue was almost flat — $13,263 million against $13,310 million a year earlier, down 0.4% — while trade receivables fell 26.7% in the six months to June 30, from $977 million to $716 million. Measured against quarterly revenue, days of sales tied up in receivables stood at 9.3 at June 30, 2026, against 11.7 at December 31, 2025; both figures use the nearest available quarterly revenue as denominator rather than the directly adjacent quarter's revenue, so the comparison is approximate (LineVest calculation from the filing's balance sheet and income statement; FCX does not report this metric). Some of that is simply smaller shipments from Indonesia, where the Grasberg Block Cave mine is restarting in phases. Collections released $268 million of cash in the six months, against a $320 million absorption a year earlier — a $588 million swing that flattered operating cash flow without anything improving underground.
The inventory build points the other way. Current inventories rose $371 million in total, but finished product barely moved. The increase is in consumable supplies and ore stockpiles — the inputs a mine holds while it prepares to run harder. Management expects full-year production to exceed sales by roughly 100 million pounds of copper and 50 thousand ounces of gold, held as inventory at PTFI's smelting operations. That deferral is still ahead, not behind.
One line deserves a separate look. Long-term tax receivables rose $256 million. In April 2026 Indonesian tax authorities assessed PTFI $220 million over 2022 audit exceptions; PTFI paid the assessment on June 30 and filed objections. The cash is gone, the recovery is contested, and it now sits as a receivable.
1-2. Debt barely moved — but $754 million slid into next year's column
Total debt was $9,386 million at June 30 against $9,379 million at December 31. That is a $7 million change. The current portion, however, went from $466 million to $1,220 million while long-term debt fell from $8,913 million to $8,166 million — predominantly a reclassification, with net new borrowing of only $7 million. Gross issuance of $2,077 million was almost exactly offset by $2,072 million of repayments.
FCX dealt with the term structure before that shift became a problem. In May 2026 it replaced a revolver maturing in October 2027 with a new $3.0 billion five-year facility running to May 2031; Cerro Verde did the same with a $350 million facility. Undrawn capacity at quarter-end was $3.0 billion at FCX, $1.5 billion at PTFI and $350 million at Cerro Verde. Net debt was $2.1 billion once $3.2 billion of debt for PTFI's downstream processing plants is excluded. All entities were in compliance with their covenants.
A quieter cost signal sits in the interest note. Gross interest costs before capitalization reached $240 million in the quarter against $181 million a year earlier — up 33%. Reported net interest expense rose only from $82 million to $95 million, because capitalized interest jumped from $99 million to $145 million. A one-off item sits behind both moves, though the filing sizes it only at the half-year level: of the $414 million of six-month gross interest costs, $67 million is a nonrecurring adjustment for prior period withholding taxes on PTFI's senior notes, and $64 million of the $205 million of six-month capitalized interest carries the same label. Since six-month capitalized interest was flat year on year ($205 million against $203 million) while the quarter jumped $46 million, that adjustment almost certainly landed in the second quarter — but the filing does not say so outright.
1-3. 37.6% of the equity does not belong to FCX shareholders
Total equity of $32,222 million includes $12,113 million of noncontrolling interests — 37.6% of the total. FCX owns 48.76% of PT Freeport Indonesia and 53.56% of Cerro Verde, yet consolidates both in full. Every revenue and cost line in this filing is 100% of assets that are partly someone else's, with the correction applied at a single line near the bottom of the income statement.
The capital base is paid-in rather than earned. Capital in excess of par stands at $23,659 million against retained earnings of just $2,816 million — the residue of the oil and gas write-downs of 2015 and 2016, when impairments of that scale drove consecutive annual operating losses. Retained earnings did double in six months, from $1,385 million, as $1,865 million of attributable profit arrived against $434 million of dividends. Treasury stock rose $203 million: 3.4 million shares at an average $59.71, leaving $2.8 billion of the $5.0 billion repurchase authorization unused.
2. Income Statement — Prices Rose a Third, Revenue Still Fell
Realized prices rose across every product FCX sells, and revenue still fell. That is the defining fact of the quarter.
The row to watch below is the last one. Operating margin compressed in the quarter even as realized prices climbed by more than a third; the half-year column moves the other way only because of an insurance gain, stripped out in section 2-3.
| Item | Q2 2025 ($M) | Q2 2026 ($M) | H1 2025 ($M) | H1 2026 ($M) |
|---|---|---|---|---|
| Revenues | 7,582 | 7,029 | 13,310 | 13,263 |
| Production and delivery | 4,282 | 4,320 | 8,038 | 8,385 |
| Depreciation, depletion and amortization | 668 | 523 | 1,134 | 1,037 |
| Operating income | 2,432 | 2,003 | 3,735 | 4,140 |
| Net income | 1,547 | 1,391 | 2,340 | 2,778 |
| Less: noncontrolling interests | (775) | (407) | (1,216) | (913) |
| Net income to common stockholders | 772 | 984 | 1,124 | 1,865 |
| Diluted EPS ($) | 0.53 | 0.68 | 0.77 | 1.29 |
| Operating margin (%) | 32.1 | 28.5 | 28.1 | 31.2 |
Three-year context, from annual filings: revenue compounded 4.4% a year from 2022 to 2025, while operating income compounded at negative 2.5%. This is a business whose top line has been carried by price and whose profit has been held flat by cost.
2-1. Gold did more damage than copper
Copper sales volumes fell 30.1%, to 710 million pounds from 1,016 million. Gold sales fell 76.4%, to 123 thousand ounces from 522 thousand. Realized prices rose 36% for copper, 37% for gold and 36% for molybdenum.
The company's own revenue bridge settles which mattered. Lost copper volume cost $1,389 million; higher copper prices returned $1,157 million. Net damage from copper: $232 million. Lost gold volume cost $1,313 million; higher gold prices returned only $151 million. Net damage from gold: $1,162 million — five times the copper hit.
Freeport is described, correctly, as a copper company. But Grasberg's copper concentrate carries gold as a by-product, and by-product ounces do not scale back gracefully. With the London PM gold price averaging $4,506 an ounce during the quarter, the ounces FCX could not ship were the most expensive thing it lost. Full-year guidance implies roughly 410 thousand ounces of gold sales in the second half against 244 thousand in the first — recovery is expected, but it is still guidance.
2-2. Volumes fell 30%; cash production costs did not fall at all
Production and delivery expense rose 0.9% in the quarter, to $4,320 million, while copper sales volumes fell 30.1%. Site production and delivery costs per pound went from $2.71 to $3.28, up 21.0%. Unit net cash costs — production cash cost after credits for gold and molybdenum sold alongside the copper — rose from $1.13 to $1.97 per pound, up 74.3%.
That headline cost figure excludes something. Idle facility and restoration costs at Grasberg are treated as non-inventoriable and are kept out of unit costs: $0.40 per pound in the quarter and $0.50 per pound across the half. Include them and the quarter's effective unit cash cost is nearer $2.37. In dollars, idle and restoration charges totalled $363 million in the quarter ($284 million in production and delivery, $79 million in depreciation) and $862 million in the half. Management expects roughly $1.2 billion for the full year, including $0.3 billion in the third quarter and an implied $38 million in the fourth quarter as Grasberg returns toward capacity.
Depreciation fell 21.7%, to $523 million, which cushioned the reported cost line. Depletion follows tonnes mined, so that decline is a symptom of the outage rather than a saving.
Operating leverage ran at about 2.4 to 1 in the quarter: each 1% of lost revenue cost 2.4% of operating income. That is the signature of a business whose costs are mostly fixed against volume.
2-3. Indonesia's underlying profit fell 76%, not 49%
Indonesia's segment operating income fell 73.3% in the quarter, from $1,868 million to $499 million, on revenue down 56.6%. Morenci more than doubled, from $132 million to $265 million. Cerro Verde rose 116.5%, from $340 million to $736 million. Both gained on price alone.
The half-year comparison is where the insurance settlement has to be stripped out. Indonesia's six-month segment operating income of $1,341 million, against $2,645 million a year earlier, reads as a 49.3% decline — but it includes the entire $699 million insurance gain. Excluding it, Indonesia earned $642 million, a 75.7% decline. Consolidated operating income tells the same story once adjusted: the reported $4,140 million for the half, up 10.8%, becomes $3,441 million excluding the gain, down 7.9%.
2-4. The earnings gain lives below the operating line
Operating income fell $429 million in the quarter. Profit to shareholders rose $212 million. Two lines explain the reversal, and neither is operational.
Tax came first. The provision fell from $850 million to $544 million, and the six-month effective rate dropped from 37% to 30%. Indonesia is a high-tax jurisdiction; US earnings are shielded by loss carryforwards, leaving mainly the Corporate Alternative Minimum Tax. Shifting the profit mix from Papua to Arizona lowers the blended rate mechanically.
Noncontrolling interests came second, and larger. The deduction fell 47.5%, from $775 million to $407 million. Indonesia's collapse drove that, partly offset by Cerro Verde's improvement, where minorities hold 46.44%. The same geographic shift that cut the tax rate cut the minority share — one cause, two benefits, both temporary by construction. When Grasberg returns to capacity, both reverse.
3. Cash Flow — Up 8.9% on Paper, Down 12.6% Without the Insurance Check
Operating cash flow of $3,543 million for the half included $699 million of insurance proceeds from the mud rush incident. Strip that out and the figure is $2,844 million, against $3,253 million a year earlier — a 12.6% decline, against the 8.9% increase the reported line shows.
3-1. The capex cut, not the mine, paid for free cash flow
Capital expenditures fell to $2,077 million from $2,433 million, down 14.6%. Indonesia's cut of $472 million exceeded the $356 million total reduction — non-Indonesia capital expenditure rose $116 million — as Indonesia spending dropped to $972 million from $1,444 million, down 32.7%, because a mine that is not running is also a mine that is not being built out on sch
