Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Statement of Comprehensive Income
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Reportable Segments
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
- Aggregate Accruals
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Profitability Ratios (Summary)
Freeport-McMoRan Inc., profitability ratios
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The profitability metrics demonstrate a consistent decline from 2021 to 2023, followed by a stabilization and slight recovery in 2024 and 2025. This suggests increasing pressure on earnings throughout the initial period, with a potential leveling off in more recent years. The extent of the decline varies across different profitability measures, indicating shifts in where within the income statement the pressure is most pronounced.
- Gross Profit Margin
- The gross profit margin experienced a steady decrease from 38.59% in 2021 to 28.16% in 2025. This consistent downward trend suggests increasing costs of goods sold relative to revenue, potentially due to rising input prices, less favorable sales mix, or increased production inefficiencies. The rate of decline appears to moderate between 2024 and 2025.
- Operating Profit Margin
- Similar to the gross profit margin, the operating profit margin also declined from 36.62% in 2021 to 25.15% in 2025. The decrease, while consistent, is less pronounced than that of the gross profit margin, indicating that operating expenses were relatively well-controlled despite the revenue pressures. The operating profit margin shows a minimal increase from 26.97% in 2024 to 25.15% in 2025.
- Net Profit Margin
- The net profit margin exhibited the most significant decline, falling from 18.85% in 2021 to a low of 7.42% in 2024 before a modest recovery to 8.50% in 2025. This suggests that factors beyond core operations, such as interest expense or taxes, may have contributed significantly to the reduced profitability. The recovery in 2025, though small, indicates a potential stabilization of these non-operating factors.
- Return on Equity (ROE)
- ROE mirrored the overall trend of declining profitability, decreasing from 30.80% in 2021 to 10.74% in 2024, before increasing to 11.66% in 2025. This indicates a reduced ability to generate profits from shareholder investments. The slight increase in 2025 suggests a potential improvement in capital efficiency or a stabilization of earnings.
- Return on Assets (ROA)
- ROA also demonstrated a declining trend, moving from 8.97% in 2021 to 3.44% in 2024, with a slight increase to 3.79% in 2025. This indicates a decreasing ability to generate profits from the company’s assets. The modest recovery in 2025 suggests a potential improvement in asset utilization or profitability.
In summary, the period from 2021 to 2023 was characterized by a consistent erosion of profitability across all measured ratios. While 2024 and 2025 show signs of stabilization, the metrics remain significantly lower than those observed in 2021, suggesting ongoing challenges to profitability.
Return on Sales
Return on Investment
Gross Profit Margin
Freeport-McMoRan Inc., gross profit margin calculation
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Revenues | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × ÷ =
The gross profit margin exhibited a consistent decline over the five-year period. While gross profit fluctuated, revenues generally increased, driving the observed margin compression.
- Gross Profit Margin Trend
- The gross profit margin decreased from 38.59% in 2021 to 28.16% in 2025. This represents a total decrease of 10.43 percentage points over the period.
- Year-over-Year Changes
- The largest year-over-year decrease in gross profit margin occurred between 2021 and 2022, with a reduction of 4.83 percentage points. A further decrease of 2.43 percentage points was observed between 2022 and 2023. The decline moderated somewhat between 2023 and 2024 (a decrease of 0.9 percentage points), but continued between 2024 and 2025 with a decrease of 1.93 percentage points.
- Relationship to Revenue
- Revenues demonstrated an overall upward trend, increasing from US$22,845 million in 2021 to US$25,915 million in 2025. However, this revenue growth did not translate into a corresponding increase in gross profit margin. The gross profit remained relatively stable, fluctuating between US$7,160 million and US$8,815 million, indicating that the cost of goods sold increased at a faster rate than revenue.
- Gross Profit Fluctuation
- Gross profit experienced a decrease from US$8,815 million in 2021 to US$7,691 million in 2022, then further decreased to US$7,160 million in 2023. It saw a slight recovery to US$7,660 million in 2024, before decreasing again to US$7,297 million in 2025. This volatility suggests potential fluctuations in production costs or pricing pressures.
Operating Profit Margin
Freeport-McMoRan Inc., operating profit margin calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Operating profit margin = 100 × Operating income ÷ Revenues
= 100 × ÷ =
The operating profit margin exhibited a declining trend over the five-year period. While operating income fluctuated, revenues generally increased, influencing the observed margin compression.
- Operating Profit Margin Trend
- The operating profit margin decreased consistently from 36.62% in 2021 to 25.15% in 2025. This represents a total decline of 11.47 percentage points over the period.
- Relationship to Operating Income
- Operating income decreased from US$8,366 million in 2021 to US$6,225 million in 2022, contributing to the initial margin decline. It then experienced a modest increase to US$6,864 million in 2023 and US$6,518 million in 2024 before settling at the latter level in 2025. Despite these fluctuations, operating income did not increase sufficiently to offset the impact of revenue growth on the margin.
- Relationship to Revenues
- Revenues remained relatively stable between 2021 and 2023, fluctuating around US$22.8 billion. A noticeable increase in revenues occurred in 2024, reaching US$25.455 billion, and continued into 2025 with US$25.915 billion. The consistent growth in revenues, coupled with relatively stable operating income, is the primary driver of the declining operating profit margin.
The consistent revenue growth, while positive, appears to have been accompanied by increasing costs or pricing pressures, resulting in a lower proportion of each revenue dollar translating into operating profit. Further investigation into cost of goods sold and operating expenses would be necessary to determine the specific factors contributing to this trend.
Net Profit Margin
Freeport-McMoRan Inc., net profit margin calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Net profit margin = 100 × Net income attributable to common stockholders ÷ Revenues
= 100 × ÷ =
The net profit margin exhibited a declining trend from 2021 to 2023, followed by a period of stabilization and modest improvement through 2025. While revenues demonstrated relative stability initially, they increased in the later years of the observed period. A closer examination of the net profit margin reveals key insights into the company’s profitability.
- Overall Trend
- The net profit margin decreased significantly from 18.85% in 2021 to 8.09% in 2023. This represents a substantial reduction in profitability, indicating that a smaller portion of each revenue dollar was retained as net income. The margin then showed a slight recovery, reaching 7.42% in 2024 and further improving to 8.50% in 2025, though it did not return to the levels seen in 2021.
- Revenue Correlation
- From 2021 to 2023, revenues remained relatively consistent, fluctuating between US$22.78 billion and US$22.855 billion. The decline in net profit margin during this period suggests that factors other than revenue volume, such as increased costs or decreased pricing power, were primarily responsible for the reduced profitability. However, revenues increased to US$25.455 billion in 2024 and US$25.915 billion in 2025. The modest improvement in net profit margin in these years suggests that revenue growth contributed to the stabilization of profitability, but was not sufficient to fully offset the earlier declines.
- Year-over-Year Changes
- The largest year-over-year decrease in net profit margin occurred between 2021 and 2022, falling by 3.63 percentage points. The decline continued, albeit at a slower pace, between 2022 and 2023, decreasing by 7.13 percentage points. The subsequent increases in 2024 and 2025 were more modest, at 0.58 and 1.08 percentage points respectively. These changes indicate that the initial factors impacting profitability were more pronounced in the earlier period, with subsequent improvements being incremental.
- Net Income Impact
- Net income attributable to common stockholders decreased from US$4,306 million in 2021 to US$1,848 million in 2023, mirroring the decline in the net profit margin. While net income increased in 2024 and 2025 to US$1,889 million and US$2,204 million respectively, these levels remained below the 2021 peak, consistent with the net profit margin not fully recovering to its prior level.
Return on Equity (ROE)
Freeport-McMoRan Inc., ROE calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
ROE = 100 × Net income attributable to common stockholders ÷ Stockholders’ equity
= 100 × ÷ =
The return on equity (ROE) exhibited a declining trend over the observed period, followed by a slight stabilization in the most recent year. Net income attributable to common stockholders decreased from 2021 to 2023, while stockholders’ equity generally increased. These movements significantly impacted the ROE calculation.
- ROE Trend
- The ROE began at 30.80% in 2021. A substantial decrease was observed in 2022, falling to 22.30%. This downward trend continued into 2023, with the ROE reaching 11.07%. The decline slowed in 2024, with a ROE of 10.74%, and showed a modest increase to 11.66% in 2025.
- Net Income Impact
- Net income attributable to common stockholders decreased from US$4,306 million in 2021 to US$1,848 million in 2023. While net income experienced a slight recovery in 2024 and 2025, reaching US$1,889 million and US$2,204 million respectively, it did not return to the levels seen in 2021. This reduction in net income contributed significantly to the overall decline in ROE.
- Stockholders’ Equity Impact
- Stockholders’ equity consistently increased throughout the period, rising from US$13,980 million in 2021 to US$18,899 million in 2025. While increasing equity generally indicates financial strength, it also serves to dilute the ROE when net income declines, as the return is spread across a larger equity base. The consistent growth in equity partially offset the impact of declining net income on the ROE.
The combination of decreasing net income and increasing stockholders’ equity resulted in a pronounced decrease in ROE from 2021 to 2023. The stabilization of ROE in 2024 and 2025 suggests that the decline may be moderating, but the ratio remains significantly lower than its initial value.
Return on Assets (ROA)
Freeport-McMoRan Inc., ROA calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
ROA = 100 × Net income attributable to common stockholders ÷ Total assets
= 100 × ÷ =
The Return on Assets (ROA) exhibited a declining trend from 2021 to 2023, followed by a stabilization and slight increase through 2025. This analysis details the observed patterns in ROA alongside its constituent components, net income attributable to common stockholders and total assets.
- Overall ROA Trend
- ROA decreased from 8.97% in 2021 to 3.52% in 2023, representing a significant reduction in profitability relative to asset base. The decline slowed in 2024, with ROA at 3.44%, and then showed a modest recovery to 3.79% in 2025. This suggests that while profitability challenges persisted, the rate of decline lessened and a slight improvement was achieved in the most recent period.
- Net Income Impact
- Net income attributable to common stockholders decreased from US$4,306 million in 2021 to US$1,848 million in 2023. This decrease is a primary driver of the ROA decline. Net income experienced a slight increase in 2024 to US$1,889 million and further increased to US$2,204 million in 2025, contributing to the stabilization and subsequent modest improvement in ROA.
- Asset Base Impact
- Total assets increased consistently throughout the period, rising from US$48,022 million in 2021 to US$58,167 million in 2025. This continuous growth in the asset base, coupled with the initial decline in net income, exacerbated the decrease in ROA. The increasing asset base suggests expansion or investment activity, but the benefits of these investments were not immediately reflected in proportional increases in profitability until 2024 and 2025.
In summary, the observed ROA trend reflects a period of declining profitability relative to the growing asset base, followed by a period of stabilization and modest recovery driven by increases in net income. The consistent growth in total assets indicates ongoing investment, and the recent improvement in ROA suggests these investments are beginning to yield positive results.