Southern Copper soars on earnings beat, dividend boost
Cost cuts drive record quarterly sales as miner returns cash to shareholders
Southern Copper Corporation shares advanced in Wednesday trading after the mining giant delivered stronger-than-expected fourth-quarter results, driven by record sales and substantial cost reductions that underscore the company's operational efficiency during a period of elevated copper prices.
The Phoenix-based company reported adjusted earnings per share of $1.56 for the final three months of 2025, exceeding analyst estimates of $1.26 by nearly 24%. Revenue reached $3.87 billion, surpassing the $3.21 billion consensus forecast and representing a 39% increase from the same period a year earlier, according to the company's regulatory filing with the Securities and Exchange Commission.
Net income surged 64.7% year-over-year to $1.31 billion, reflecting both higher metal volumes and improved pricing dynamics in copper markets. The standout operational metric was operating cash costs, which plummeted 45.8% to $0.52 per pound, a dramatic improvement that positions Southern Copper among the industry's lowest-cost producers.
"This was an exceptionally strong quarter across all metrics, with the combination of record sales and dramatic cost improvements demonstrating the strength of our asset portfolio," the company stated in its earnings announcement.
The robust financial performance enabled Southern Copper's board to declare a quarterly cash dividend of $1.00 per share, an increase from the previous $0.90 payout, alongside a stock dividend of 0.0085 shares per common share. The cash dividend is payable February 27, 2026, to shareholders of record as of February 10, according to dividend tracking data.
Shares rose 1.7% following the announcement, trading at $198.18 and extending the stock's gains for the year. The company now trades near its 52-week high of $194.98, significantly above analysts' average target price of $138.45, suggesting elevated investor expectations for continued copper demand growth driven by renewable energy and electric vehicle infrastructure investments.
Southern Copper's operating margins have strengthened considerably, with the company recording an operating margin of 52.4% over the trailing twelve months and a profit margin of 31%. The dramatic reduction in cash costs per pound to $0.52 provides substantial operating leverage should copper prices remain elevated, positioning the company to generate strong free cash flow even under moderate price scenarios.
The dividend increase, combined with the special stock dividend, reflects management's confidence in sustained cash generation. With a current dividend yield of 1.54%, Southern Copper returns capital to shareholders while maintaining financial flexibility for growth projects across its extensive mining portfolio in Peru, Mexico, Argentina, Ecuador, and Chile.
Analysts maintain a mixed outlook on the stock, with ratings split between buy and hold recommendations, reflecting concerns about valuation at current price levels. The stock trades at 40.7 times trailing earnings, a premium multiple that incorporates expectations for continued strong copper demand tied to the global energy transition.
Looking ahead, investors will focus on Southern Copper's 2026 production guidance and capital expenditure plans, as the company balances returning cash to shareholders with investing in expansion projects to meet growing copper demand. The miner's ability to maintain its cost advantage while navigating potential labor disruptions and regulatory changes across its Latin American operations will be key watch factors for the coming year.