Freeport-McMoRan Slides on Major Revenue Miss at Grasberg Mine
Mining giant warns of a slow 2026 start after a September mudslide crippled production at its flagship Indonesian operation, overshadowing an earnings beat.
Freeport-McMoRan (NYSE: FCX) shares came under pressure Thursday after the mining behemoth reported a significant 16.3% revenue shortfall for the fourth quarter, directly linked to a major operational failure at its critical Grasberg mine in Indonesia.
The company posted revenue of $5.63 billion, falling far short of the $6.73 billion analysts had anticipated. The sharp miss was attributed to the temporary suspension of operations at the Grasberg minerals district, one of the world's largest sources of copper and gold, following a mudslide in September. The disruption overshadowed an otherwise positive earnings-per-share of $0.47, which topped the consensus estimate of $0.41.
In a clear sign of the challenges ahead, management warned of a sluggish recovery, guiding for a slow start to 2026. The company stated that it expects the majority of its sales for the year to be concentrated in the second half as operations gradually ramp back up. According to a company update on restart plans, a phased resumption of mining activities is anticipated to begin in the second quarter of 2026, with a return to full pre-incident production rates not expected until 2027.
The news deals a blow to investor sentiment, which had been buoyed by firming copper prices and a rally in the stock heading into the earnings announcement. The operational setback underscores the inherent risks in large-scale mining operations and highlights the company's dependence on the seamless functioning of its key assets.
The Grasberg incident had already prompted concern from analysts, with some adjusting forecasts downward immediately following the September event. While the copper market's long-term fundamentals remain strong, buoyed by demand from green energy initiatives and global electrification, Freeport's near-term ability to capitalize on this trend is now constrained.
Freeport's stock had performed well prior to the report, trading near its 52-week high. However, the weak guidance and the scale of the revenue impact from the Grasberg stoppage have forced investors to reassess the company's growth trajectory for the coming year. The results put a spotlight on the company's ability to execute a complex and prolonged operational restart in Indonesia.
As detailed in its fourth-quarter regulatory filing, the production halt directly impacted the volume of copper and gold available for sale in the quarter. The delayed sales volumes are now expected to weigh on first and second-quarter results for 2026, shifting significant revenue into the back half of the year and creating a period of uncertainty for investors.
Looking forward, the market will be closely watching for further updates on the Grasberg restart and any revisions to the company's full-year production and sales guidance. While the long-term demand for copper remains a powerful tailwind for Freeport-McMoRan, navigating the immediate operational and financial fallout from the Grasberg incident will be management's primary challenge.