SCCO Q2 Earnings Beat on Strong Metal Prices Despite Low Volumes

Revenues surged 40.6% year over year to a quarterly record of $4.29 billion but missed the consensus estimate of $4.37 billion by 1.88%. Higher prices for copper, molybdenum, zinc and silver were offset by lower sales volumes for copper and its main products. 

Cost of sales increased 14.7% year over year to $1.39 billion. Total operating costs and expenses rose 13.8% to $1.67 billion, reflecting higher spending on operating materials, purchased copper, diesel and fuel, and workers’ participation.

Operating cash cost after incorporating by-product revenue credits was five cents per pound in the quarter compared with 63 cents in the prior-year quarter, owing to an increase in by-product revenue credits.

Operating income jumped 65.3% to $2.62 billion. Adjusted EBITDA reached a record $2.86 billion, up 59.5% from the prior-year quarter. The adjusted EBITDA margin expanded 790 basis points to 66.6%, reflecting stronger realized prices and disciplined cost management.

Net income attributable to SCCO also reached a record $1.67 billion, rising 71.6% year over year. The net income margin improved to 38.9% from 31.9% in the year-ago period.

SCCO’s Q2 Production Falls on Lower Peruvian Grades

Southern Copper mined 230,662 tons of copper in the reported quarter, down 3.5% year over year. Total copper production decreased 3.6% year

over year to 232,521 tons, including third-party concentrate. A 12% decline at the Peruvian operations more than offset a 3.2% increase in Mexico.  Copper sales declined 1.5% to 220,712 tons.

The company mined 7,046 tons of molybdenum in the reported quarter, reflecting a year-over-year decline of 11%. Sales were 6,821 tons in the quarter under review, down 13% from the second quarter of 2025.

Zinc production declined 14.5% year over year to 39,257 tons in the quarter under review on lower production at the Buenavista zinc concentrator. Zinc sales decreased 8.8% year over year to 40,570 tons in the quarter.

Southern Copper's silver production was down 3.8% year over year to 5.76 million ounces, and sales were down 8.7% year over year to 5.516 million ounces.

SCCO Strengthens Cash Flow and Liquidity

Net cash provided by operating activities totaled $1.99 billion in the quarter, more than double the prior-year figure. For the first six months of 2026, operating cash flow increased 116.9% to $3.68 billion, supported by stronger earnings and lower operating working-capital requirements.

Cash and cash equivalents stood at $5.67 billion as of June 30, 2026, while short-term investments totaled $1.66 billion. Long-term debt was $7.99 billion following the issuance of $1.25 billion of 10-year senior unsecured notes carrying a 5.35% interest rate. The proceeds are intended primarily to support the Tía María project and other capital needs of the company’s Peruvian operations.

Southern Copper’s Guidance for 2026

For 2026, Southern Copper expects copper production to reach 917,000 tons, which is 1% above its previous target but implies a 5% year-over-year decline. 

Molybdenum production is now projected at 27,900 tons, a 7% increase from its previous target, indicating a 10% decline from the 2025 level. Silver output is projected at 24 million ounces, a decrease of 1% compared with 2025.  Zinc production for the year is projected at 163,900 tons, 7% lower than the 2025 level. 

SCCO Stock’s Price Performance

The company’s shares have gained 84.6% in the past year compared with the industry’s 51.2% growth.

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SCCO’s Peer Performances

Freeport-McMoRan Inc. FCX reported adjusted EPS of 74 cents in the second quarter, up around 37% year over year from 54 cents. The figure topped the Zacks Consensus Estimate of 62 cents. Revenues declined around 7.3% year over year to approximately $7.03 billion. The figure surpassed the Zacks Consensus Estimate of $6.47 billion. Higher realized metal prices were offset by lower copper and gold volumes.

Copper production fell around 18.4% year over year to 786 million pounds in the reported quarter. Consolidated copper sales declined approximately 30.1% year over year to 710 million pounds. The fall primarily resulted from lower operating rates at PTFI during the phased ramp-up of the Grasberg Block Cave underground mine.   The company sold 123,000 ounces of gold in the quarter, down 76.4% year over year. Freeport also sold 25 million pounds of molybdenum, up 13.6% from the prior-year quarter.  

Teck Resources Limited TECK reported second-quarter 2026 adjusted EPS of CAD $1.93 or $1.39, beating the Zacks Consensus Estimate of 78 cents. It marked a substantial improvement of 415% from the earnings of 27 cents per share in the year-ago quarter. This was attributed to higher base metal prices and increased sales volume of copper and zinc. Including one-time items, the company reported EPS of $1.26 in the quarter compared with the year-ago quarter’s 30 cents.

Net sales amounted to $2.6 billion, surpassing the Zacks Consensus Estimate of $2.3 billion. The figure reflects a 78% year-over-year improvement, aided by higher copper and zinc prices and sales. 

SCCO’s Zacks Rank & Another Stock to Consider

Southern Copper currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Another top-ranked stock from the basic materials space is Bunge Global SA BG, which sports a Zacks Rank of 1 at present. 

Bunge has an average trailing four-quarter earnings surprise of 27.5%. The Zacks Consensus Estimate for the company’s fiscal 2026 earnings is pegged at $9.74 per share, implying 28.7% year-over-year growth. Bunge shares have gained 59% in a year.

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