Freeport-McMoRan Inc. (NYSE:FCX)

Return on Assets (ROA)

The Return on Assets exhibited an upward trend throughout 2021, peaking at 10.47% in the first quarter of 2022. Following this peak, ROA began a general decline through 2023, reaching a low of 3.06% in the first quarter of 2024. Throughout 2024 and into mid-2025, the ROA showed a modest recovery, stabilizing around a 3.4% level but remaining noticeably lower than the peak values observed in early 2022.

Financial Leverage

Financial leverage demonstrated a gradual decline over the period from early 2021 to mid-2025. The ratio decreased from 4 in the first quarter of 2021 to approximately 3.1 by the second quarter of 2025. This trend suggests a consistent, albeit moderate, reduction in the company’s reliance on debt financing relative to equity over the observed periods.

Return on Equity (ROE)

The Return on Equity followed a similar trajectory to ROA but with greater variability. ROE increased significantly during 2021, reaching a maximum of 34.41% in the first quarter of 2022. Thereafter, the ratio declined substantially throughout 2022 and 2023, reaching a low of around 9.77% by the first quarter of 2024. From that point onward, ROE exhibited minor fluctuations, generally stabilizing in the range of 10-11%, which is considerably lower than the peak values but indicates some recovery and stabilization in equity returns.

Summary Insights

Overall, the financial performance as measured by both ROA and ROE showed strong improvement through 2021 into early 2022, followed by a marked decline through 2023 and partial stabilization into 2024 and 2025. The simultaneous decline in financial leverage over the same period may indicate a strategic move towards lower financial risk, which could partially explain the reduced returns on assets and equity. The patterns reflect a cycle of peak profitability and efficiency, succeeded by decreased performance and subsequent stabilization, suggesting the company may be adjusting to changing market or operational conditions.

The analyzed financial data reveals several notable trends in key performance metrics over the examined periods.

Net Profit Margin

The net profit margin demonstrated a rising trend from early 2021, increasing from 11.13% to a peak near 20.79% by the first quarter of 2022. Thereafter, it gradually declined, falling to a range around 7% to 8% by late 2024 and early 2025. This pattern suggests the company experienced heightened profitability in 2021 through early 2022, followed by a sustained decrease in profit efficiency relative to revenues in the subsequent years.

Asset Turnover

Asset turnover showed a steady increase initially, moving from 0.37 in the first quarter of 2021 to a peak of 0.5 in the first quarter of 2022. After this peak, the ratio slightly decreased and then stabilized, maintaining a relatively consistent level around 0.44 to 0.46 through the remainder of the period. This indicates initial improvements in asset utilization efficiency, with consistent performance thereafter without substantial changes.

Financial Leverage

The financial leverage ratio decreased from 4.00 at the start of 2021 to approximately 3.1 by mid-2025. This steady decline illustrates a gradual reduction in reliance on debt or other liabilities relative to equity, implying a deleveraging trend over time that could reflect a more conservative capital structure or improved equity financing.

Return on Equity (ROE)

ROE exhibited a strong upward trajectory from 16.56% in early 2021 to a peak near 34.41% by the first quarter of 2022, aligning with the trends in net profit margin. Post-peak, ROE declined sharply and then more moderately, stabilizing around 10% to 11% from late 2023 onward. This pattern indicates that while the company achieved high efficiency in generating returns on shareholder equity during the earlier period, returns have normalized to a lower but steady level subsequently.

In summary, the data reflects that the company experienced robust profitability and returns on equity through early 2022, powered by improved asset turnover and financial leverage management. However, following this period, profitability measures and returns normalized to lower levels despite consistent asset utilization. Additionally, the ongoing reduction in financial leverage suggests strategic adjustments in capital structure aimed at reducing risk or strengthening the balance sheet over time.

The financial data reveals multiple trends in key performance indicators over the examined periods.

Tax Burden

The tax burden ratio showed a gradual increase from early 2021, peaking at around 0.66 in early 2022. Following this peak, there was a consistent decline observed through 2023 and 2024, reaching a low near 0.41 to 0.42 by mid-2025. This suggests a decreasing proportion of income paid as taxes in the later periods.

Interest Burden

This ratio increased steadily from 0.84 in the first quarter of 2021 to approximately 0.94 by mid-2025, indicating improved operational efficiency in covering interest expenses or reduced interest costs relative to earnings before interest and taxes.

EBIT Margin

The EBIT margin started strong at almost 24% in early 2021, peaking above 34% around the first half of 2022. After this high, it declined gradually throughout 2023 and 2024, settling in the range of about 18% to 19% by 2025. This downward trend reflects compression in earnings before interest and taxes relative to revenues.

Asset Turnover

Asset turnover improved from 0.37 in the first quarter of 2021 to a high of around 0.50 by early 2022. Post that peak, it experienced a mild contraction but remained relatively stable fluctuating between 0.42 and 0.46 in subsequent quarters, indicating consistent efficiency in asset utilization for generating sales.

Financial Leverage

Financial leverage showed a declining trend from a ratio of 4 in early 2021 to around 3.28 by early 2022, and then remained relatively stable around the low threes through 2023 to mid-2025. This signifies moderate deleveraging initially, followed by steady leverage management.

Return on Equity (ROE)

ROE increased significantly from about 16.6% in early 2021 to a peak above 34% in early 2022, followed by a sharp decline through 2023, reaching a low near 9.8% in early 2024. A slight recovery occurred thereafter, stabilizing around 10% to 11% through 2025. This pattern indicates strong profitability improvement initially, followed by reduced returns on shareholder equity over time.

In summary, the company experienced a period of improving profitability and efficiency through early to mid-2022, demonstrated by rising ROE, EBIT margin, and asset turnover, along with lower financial leverage. However, these positive trends reversed from late 2022 onwards, with declining profitability margins, stable asset usage, and a gradual reduction in tax burden. The interest burden improved consistently, suggesting better control over interest costs throughout the period. Overall, the data reflects a peak in operational and financial performance around early 2022, followed by a period of adjustment and consolidation in subsequent years.

The analysis of the quarterly financial indicators reveals distinct trends over the examined periods. The Net Profit Margin initially experienced an upward trajectory from early 2021 through the first quarter of 2022, reaching a peak around 20.79%. This growth phase was followed by a gradual decline starting mid-2022, continuing steadily downward into 2023 and persisting with slight fluctuations throughout 2024 and into mid-2025. By the latest quarter observed, the margin stabilized at a lower level near 7%, indicating a reduction in profitability relative to sales compared to the prior peak periods.

Regarding Asset Turnover, this ratio showed a progressive improvement from the first quarter of 2021 to around the first quarter of 2022, indicating more efficient use of assets to generate sales. Thereafter, the measure displayed moderate fluctuations but generally maintained a relatively stable range between 0.42 and 0.46 through the subsequent quarters up to mid-2025. This suggests a consistent level of asset utilization with minor variations, lacking a clear upward or downward long-term trend in the later periods.

Return on Assets (ROA) mirrored some elements of Net Profit Margin’s pattern, increasing notably from early 2021 until the first quarter of 2022, peaking at about 10.47%. Following this peak, ROA declined through the remainder of 2022 and throughout 2023, leveling off in a narrow band between approximately 3% and 4% across 2024 and into mid-2025. The reduction in ROA indicates diminished overall profitability generated from asset base over time, aligning with the downward trend observed in profitability margins.

Summary of Key Trends

1. Net Profit Margin rose substantially until early 2022, then decreased steadily, stabilizing at a lower profitability level by 2025.

2. Asset Turnover increased initially and then remained relatively stable with minor oscillations, reflecting consistent asset utilization efficiency.

3. Return on Assets followed a similar rise and fall pattern as net margin, with a peak in early 2022 followed by a decline and stabilization at lower levels thereafter.

Overall, the financial ratios indicate a phase of improving profitability and asset performance until early 2022, succeeded by a period of reduced profitability and modest but stable operational efficiency. This pattern suggests challenges in maintaining high profit margins and returns despite steady asset utilization in the later quarters.

The financial data reveals several notable trends across various performance metrics over the observed periods.

Tax Burden

The tax burden ratio increased gradually from 0.56 to a peak near 0.66 between the first quarter of 2021 and the first quarter of 2022. Subsequently, it demonstrated a consistent downward trend, declining to around 0.41 by mid-2025. This decline indicates a reduced proportion of pre-tax earnings going to taxes in later periods.

Interest Burden

The interest burden exhibits a slight upward trend, increasing from 0.84 in early 2021 to 0.94 by mid-2025. This suggests that the company’s earnings before interest and taxes have become less impacted by interest expenses, implying improved efficiency or refinancing benefits in managing interest costs.

EBIT Margin

The EBIT margin showed strong performance initially, rising from 23.82% to its highest level of 34.06% in the first quarter of 2022. Following this peak, it declined steadily over the subsequent quarters, reaching a lower range between approximately 18% and 20% by mid-2025. This trend reflects decreasing operational profitability over time, despite some minor fluctuations.

Asset Turnover

The asset turnover ratio trended upward from 0.37 in early 2021 to around 0.5 by the first quarter of 2022, indicating better utilization of assets to generate sales. After this peak, it remained relatively stable with minor fluctuations, maintaining a range between 0.42 and 0.46 towards mid-2025. This stability suggests consistent efficiency in asset usage following initial improvements.

Return on Assets (ROA)

ROA increased significantly from 4.14% to 10.47% between early 2021 and early 2022, reflecting improved profitability relative to asset base. However, a steady decrease followed, with ROA falling to values around 3.16% to 3.62% by mid-2025. This declining trend points to reduced overall asset profitability despite earlier gains.

In summary, the company experienced an initial phase of improving profitability and asset utilization up to early 2022, characterized by rising EBIT margin, asset turnover, and ROA. Thereafter, the financial indicators generally trended downward, especially profitability metrics, accompanied by a declining tax burden and a gradually increasing interest burden. This pattern suggests challenges in maintaining operational margins and returns on assets in the latter periods, despite stable asset efficiency and improved interest cost management.

The analysis of the quarterly financial ratios reveals several notable trends over the periods observed, reflecting changes in operational efficiency, cost management, and profitability.

Tax Burden

The tax burden ratio has shown a general decline from the earlier quarters to the most recent periods. Initially, values hovered around 0.56 to 0.66 in 2021 and early 2022, indicating a moderate proportion of earnings paid as tax. From late 2022 onwards, a downward trend is evident with the ratio decreasing steadily to values near 0.41-0.44 by mid-2025. This trend suggests improving tax efficiency or potentially the impact of tax planning strategies or changes in tax legislation.

Interest Burden

The interest burden ratio demonstrates a consistent high level, remaining mostly above 0.85 throughout the period and peaking near or above 0.93 in the later years. This stability indicates that interest expenses relative to earnings before interest and taxes have been relatively stable, with a slight improvement reflected in higher ratios, which implies less interest burden on operational earnings over time.

EBIT Margin

The EBIT margin showed an increase from early 2021 through mid-2022, peaking around 34%. However, starting from late 2022, there is a clear decline in the EBIT margin, dropping gradually back to around 18-20% by mid-2025. This decline suggests reduced profitability at the operating level, possibly due to increased costs, reduced revenues, or operational challenges impacting margins.

Net Profit Margin

The net profit margin follows a similar pattern to EBIT margin but with more pronounced volatility. There was an increase to over 20% in early 2022, but thereafter, a steady decline occurred through 2023 and into 2024, reaching near 7% by 2025. This significant decrease may indicate higher non-operating expenses, increased effective tax influences, or other factors negatively affecting the bottom-line profitability.

In summary, the data reflects a period of strong profitability and operational margin improvement through 2021 and early 2022 followed by a consistent decline in profitability margins thereafter. The company appears to have managed its interest expenses effectively throughout the period, while improving tax efficiency in recent years. The declining EBIT and net profit margins warrant attention, suggesting challenges that may be affecting operating income and overall profitability.