Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 22, 2026 · Beat 6 of last 7 quarters
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Freeport's results reinforce the AI infrastructure buildout thesis: copper demand is being driven by AI data centers and energy infrastructure, with customers reporting robust order books. The company's U.S. growth plans, including the Bagdad expansion and leach initiatives, are positioned to supply the copper needed for electrification. The Grasberg ramp-up and life-of-resource extension application support long-term supply growth.
Freeport reported Q2 2026 results with copper sales and unit cash costs better than forecast, driven by steady progress on the Grasberg ramp-up and strong U.S. performance. The Grasberg Block Cave production rate doubled during the quarter from 34,000 tpd in April to 69,000 tpd in June. U.S. mining operating income was 2.4x higher in the first half versus the prior year, and consolidated net income rose 65%. The company increased its ownership in Cerro Verde to over 55% through opportunistic share purchases and returned $600 million to shareholders in the first half. Management submitted a formal application for the Grasberg life-of-resource extension in June and continued advancing the Bagdad expansion and leach initiatives.
Management reiterated its 2026-2028 volume outlook, with second-half 2026 copper sales expected over 20% higher than the first half and gold sales over 65% higher. For 2027, copper sales are expected to increase by more than 20% and gold by more than 50%, with additional growth in 2028. The Grasberg ramp-up remains on track to reach ~65% of full capacity by mid-2027 and approach full capacity by end-2027. 2027 capital expenditures were raised to $4.8 billion (up ~$300 million from April) for upgraded mining equipment and revised cost estimates. Management is finalizing the investment case for the Bagdad expansion, with a decision expected in the second half of 2026; preliminary capital is ~$4.5 billion (30% above 2023 estimate) but still supported at $4/lb copper. The company submitted a formal application for the Grasberg life-of-resource extension in June and expects to complete the process this year.
“Electricity means copper. As the world continues to electrify, it will need what we produce more than ever.”
on Copper demand thesis
“As we speak with our customers across the US, they continue to report robust copper demand and order books associated with AI data centers and related energy infrastructure and improved demand from the auto sector which is more than offsetting weakness in private construction.”
on AI-driven demand
“We are entering a period of growth in our Americas business with near and medium term opportunities to scale our leach initiatives and more than double production at our Baghdad mine in Arizona.”
on Growth pipeline
On Bagdad, the upfront CapEx is higher than the 2023 estimate, yet the incentive price is still around $4/lb. Are there offsetting operating level benefits? And should we think about a decision in 2026 or spending starting in 2027?
Kathleen Quirk confirmed the project remains supported at $4/lb copper due to operating model enhancements, including autonomous trucks and other technologies. The company is finalizing capital cost estimates with vendors and contractors, and expects to seek board approval in the second half of 2026.
On Grasberg, can you update us on the timing and next steps for the formal extension application, and any potential terms?
Kathleen Quirk explained that the terms were agreed in the February MOU, and the formal application was submitted in June consistent with those terms. The government process is underway, and they are working to complete it this year. Richard Adkerson added that meetings with the Indonesian president were very positive and all signals are good.
On the Grasberg ramp, you exited June at 69,000 tpd, but guidance for the second half is 60,000-65,000 tpd. What is driving the difference and could there be upside?
Kathleen Quirk explained that the second half includes planned downtime to complete upgrades to the material handling system in certain shoot galleries, which is reflected in guidance. The team is also progressing risk mitigation initiatives, including new drilling technology and a drainage gallery, to support the ramp-up.