Freeport-McMoRan Inc. (NYSE:FCX)

The return on equity (ROE) for the period between 2005 and 2025 demonstrates significant volatility. Initial years show strong performance, followed by substantial declines, and subsequent recovery periods. A detailed examination reveals distinct phases in the company’s profitability relative to shareholder equity.

Initial Growth & Peak (2005-2007)

From 2005 to 2007, ROE exhibited a strong upward trend, increasing from 54.00% to 59.57% and peaking at 16.33% in 2007. This period coincided with increasing net income and a substantial rise in stockholders’ equity, particularly in 2007. The increase in equity appears to be the primary driver of the ROE decline from 2006 to 2007, despite continued growth in net income.

Significant Decline (2008-2009)

2008 witnessed a dramatic downturn, with ROE plummeting to -191.70%. This was primarily attributable to a substantial net loss of over US$11 billion, while stockholders’ equity also decreased significantly. A partial recovery occurred in 2009, with ROE rising to 30.15% due to a return to profitability, although equity remained lower than pre-crisis levels.

Moderate Fluctuations (2010-2015)

The period from 2010 to 2015 showed moderate fluctuations in ROE, generally ranging between 17.33% and 34.68%. Net income remained positive for most of this period, and stockholders’ equity generally increased, contributing to relatively stable ROE values. However, 2014 and 2015 saw a net loss and a significant decrease in equity, resulting in negative ROE values of -7.15% and -156.31% respectively.

Recovery and Stabilization (2016-2019)

ROE experienced a recovery starting in 2016, reaching 26.56% in 2018. This was driven by positive net income and a moderate increase in stockholders’ equity. However, 2019 saw a net loss and a slight decrease in equity, leading to a negative ROE of -2.57%.

Recent Performance (2020-2025)

From 2020 to 2025, ROE demonstrated a more stable, albeit moderate, performance. ROE values fluctuated between 5.89% and 11.66%. Net income generally remained positive, and stockholders’ equity showed a gradual increase. The most recent year, 2025, shows an ROE of 11.66%, indicating a consistent, but not exceptional, return on shareholder investment.

Overall, the ROE demonstrates a cyclical pattern, heavily influenced by net income and, to a lesser extent, changes in stockholders’ equity. The company has experienced periods of high profitability and significant losses, resulting in substantial volatility in ROE over the analyzed timeframe.