Southern Copper (SCCO) Q2 EPS Beats 9%

Key Points

• GAAP earnings per share came in at $1.22 for Q2 2025, beating analyst estimates by 8.9% and matching last year's result.

• GAAP revenue totaled $3,051.0 million for Q2 2025, slightly ahead of estimates despite a 2.2% decrease in net sales compared to the prior-year period.

• The quarterly dividend rose 16.7% year over year, reaching $1.40 per share in cash and stock.

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Southern Copper (NYSE:SCCO), one of the world's largest integrated copper producers, reported its latest quarterly results on July 29, 2025, covering the second quarter of calendar year 2025. The most notable headline from the release was the company's ability to surpass both GAAP earnings per share and revenue expectations, despite a 3.0% drop in copper sales volumes and a year-over-year decline in GAAP revenue. Southern Copper delivered $1.22 in GAAP earnings per share against an analyst estimate of $1.12 and reported $3,051.0 million in GAAP revenue, also modestly outpacing expectations. Profitability improved due to strong cost control and by-product revenue, even as copper production in Mexico declined. Overall, the quarter showed robust cost management and disciplined capital allocation amid ongoing external challenges.

Source: Analyst estimates for the quarter provided by FactSet.

Company Overview, Focuses, and Success Factors

Southern Copper specializes in mining, smelting, and refining copper and various by-products such as zinc, molybdenum, and silver. Its main assets are located in Peru and Mexico, two regions with vast ore deposits. The company's mines—like Toquepala and Cuajone in Peru, and Buenavista and La Caridad in Mexico—anchor its global position in copper production.

In recent years, Southern Copper has focused on expanding its reserves, driving down costs, and improving operational efficiency to offset commodity price swings. Key measures include investment in advanced mining techniques, project development in Peru and Mexico, and a growing emphasis on sustainable practices. The ability to manage regulatory risks and maintain community relations are also important to its continued success.

Quarterly Performance and Notable Developments

Southern Copper's revenue for the period fell 2.2% compared to the same quarter last year, primarily due to a 3.0% drop in copper sales volume. Despite lower sales, it managed to deliver a GAAP net income margin of 31.9%, an improvement from 30.5% a year earlier. Net income (GAAP) increased 2.4% year over year, supported by a 3% decrease in operating costs and gains from by-product credits. Adjusted EBITDA was $1,790.9 million, a slight decrease from the prior year, essentially unchanged from a year ago, while the adjusted EBITDA margin rose to 58.7%.

mined copper output was 238,980 tonnes, with most of the decline concentrated in Mexico. Buenavista mine's production dropped 2.9%, and La Caridad slipped 1.7%. In contrast, mined zinc production surged by 56%, aided by the ramp-up at the Buenavista concentrator, while silver output jumped 15.4%. These by-product gains helped operating cash costs fall to $0.63 per pound of copper.

Commodity prices had a mixed impact during the quarter. The London Metal Exchange (LME) price of copper decreased 2.3%, while the COMEX price rose 3.7%. Prices for other metals varied: silver prices increased 16.6%, supporting by-product revenue, but zinc and molybdenum prices both fell. This divergence in pricing kept overall revenue and profits resilient but highlighted ongoing exposure to global metals market volatility.

Capital investment dropped sharply, with $235.7 million invested, down 29.0% from the prior-year period, while continuing development of key projects in both Peru and Mexico. On the sustainability front, Southern Copper achieved external verification of its ESG (Environmental, Social, and Governance) report for the first time and improved metrics, such as reducing lost time injuries by 24% since 2023 and increasing renewable energy use to 39% in 2024. These improvements were recognized through inclusion in the FTSE4Good Developed and US 100 indices.

For income-seeking shareholders, the quarterly dividend rose to $1.40 per share (cash and stock), a 16.7% increase from the prior year. This payout marks a continuation of Southern Copper’s practice of returning substantial capital to shareholders even amid investment in new growth projects.

Looking Ahead

Management did not provide specific financial guidance for the next quarter or the full fiscal year. However, its commentary pointed to strong operational and financial performance as the foundation for continued resilience. The company remains focused on progressing major Peru projects such as Tia Maria, Los Chancas, and Michiquillay, as well as seeking regulatory advances on stalled Mexican initiatives.

Investors should closely monitor trends in copper prices, regulatory developments—especially in Mexico, where significant capital is "on hold"—and further progress on project execution. The company highlighted its ongoing commitment to cost controls and sustainable growth strategies, but risks remain from copper production declines and uncertainty in project permitting timelines.

The quarterly dividend was raised 16.7% to $1.40 per share (cash and stock).

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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