Freeport-McMoRan Inc. (NYSE:FCX)

Return on Assets (ROA)

The ROA demonstrated a strong upward trend from early 2021 to the first quarter of 2022, rising from 4.14% to a peak of 10.47%. Following this peak, a declining pattern was observed throughout 2022 and into 2023, reaching a low of 3.06% in the first quarter of 2024. Thereafter, ROA showed a slight recovery with modest fluctuations, stabilizing around the 3.4% to 3.6% range by the end of 2025.

Financial Leverage

Financial leverage exhibited a gradual downward trend from 4.00 in the first quarter of 2021 to approximately 3.0 by the third quarter of 2025. This indicates a consistent reduction in leverage over the observed period, with only minor fluctuations. The leverage ratio decreased steadily during the initial quarters and then stabilized somewhat, fluctuating narrowly around 3.1 to 3.2 in the later periods.

Return on Equity (ROE)

ROE followed a trajectory similar to ROA, experiencing significant growth from 16.56% in the first quarter of 2021 to a high point of 34.41% in the first quarter of 2022. After this peak, there was a marked decline during the subsequent quarters, bottoming out near 9.77% by the first quarter of 2024. Subsequently, ROE showed signs of modest recovery, fluctuating slightly above 10% through to the end of 2025.

Overall Observations

The data reflects a period of strong profitability improvements in the first year followed by a decline and stabilization at lower profitability levels in later years. The reduction in financial leverage over the period might have contributed to lower risk exposure but also correlates with the decline in both ROA and ROE after their peaks. The stabilization of the ratios towards the end of the timeline suggests that the company may have adjusted to a new financial strategy or market environment, maintaining moderate returns with reduced leverage.

Net Profit Margin

The net profit margin showed a general upward trend from March 2021 to March 2022, rising from 11.13% to a peak of 20.79%. Following this peak, there was a noticeable decline throughout 2022 and into 2023, decreasing to around 8-9%. In 2024 and moving into 2025, the margin stabilized somewhat, fluctuating modestly between approximately 6.97% and 7.97%, indicating a period of stabilization after previous volatility.

Asset Turnover

Asset turnover exhibited a gradual increase from 0.37 in early 2021 to approximately 0.50 by March 2022, reflecting improved efficiency in generating revenue from assets. After March 2022, the ratio mildly declined and remained relatively stable around the 0.42 to 0.46 range up to the end of 2025. This consistency suggests that the company's ability to utilize its asset base for revenue generation has been maintained at a modest and steady level post-2022.

Financial Leverage

Financial leverage decreased from a high of 4.00 in March 2021 to around 3.28 by March 2022, indicating a reduction in the use of debt relative to equity. From that point onward, the leverage ratios hovered around 3.0 to 3.2 with only minor fluctuations. This pattern suggests a deliberate effort to maintain moderate leverage levels in subsequent periods, enhancing financial stability and potentially reducing risk exposure.

Return on Equity (ROE)

ROE followed a pattern similar to net profit margin, increasing significantly from 16.56% in March 2021 to a maximum of 34.41% in March 2022. Subsequently, there was a marked decline through 2022 and 2023, with values dropping to near 11% by the end of 2023. In 2024 and 2025, ROE stabilized around 10% to 11%, indicating moderated profitability relative to shareholders’ equity after the peak period and aligning with trends seen in net profit margin and asset turnover.

Tax Burden

The tax burden ratio showed an increasing trend from 0.56 to a peak of 0.66 between the first quarter of 2021 and the first quarter of 2022, followed by a gradual decline to 0.42 by the end of 2024. In 2025, the ratio slightly increased again, settling around 0.45. This indicates fluctuations in the proportion of earnings retained after tax, with improved tax efficiency in the later periods.

Interest Burden

The interest burden ratio remained relatively stable throughout the period, fluctuating narrowly between 0.84 and 0.94. There was a slight improvement from mid-2021 to 2024 as the ratio hovered near 0.90 or above, suggesting the company maintained a consistent ability to cover interest expenses over the full time frame.

EBIT Margin

The EBIT margin demonstrated a rise from 23.82% in early 2021 to a high of 34.06% in the first quarter of 2022, indicating increased operating profitability. However, after this peak, the margin experienced a steady decline reaching the mid-to-high teens by 2024 and early 2025. This pattern suggests diminishing operational efficiency or margin compression in the latter periods.

Asset Turnover

Asset turnover improved from 0.37 in early 2021 to around 0.50 by the first quarter of 2022, reflecting better utilization of assets in generating sales. Subsequently, the ratio stabilized in the range of 0.42 to 0.46 from 2023 onwards, indicating a consistent yet slightly lower efficiency compared to the 2022 peak.

Financial Leverage

Financial leverage decreased steadily from 4.00 in early 2021 to approximately 3.04 by mid-2025, indicating a reduction in reliance on debt financing. This gradual deleveraging trend points towards a potentially more conservative capital structure over the analyzed period.

Return on Equity (ROE)

ROE exhibited significant volatility, climbing from 16.56% at the start of 2021 to a peak of 34.41% in early 2022, driven likely by strong profitability and operational efficiency. Afterward, ROE declined sharply, reaching a low of around 9.77% in early 2024, with only slight recovery to approximately 11% by mid-2025. This trend underscores a weakening return to shareholders following the peak and suggests challenges in sustaining previous levels of profitability combined with changes in operational factors.

Summary

Overall, the company experienced strong profitability and efficiency improvements through early 2022, as evidenced by peaks in EBIT margin, asset turnover, and ROE, coupled with an increase in tax burden ratio. From mid-2022 onward, these indicators generally declined or stabilized at lower levels. The steady reduction in financial leverage indicates a strategic movement towards lower debt levels. While interest burden remained stable, the decline in EBIT margin and ROE suggests challenges in maintaining the earlier profitability momentum. The tax burden's decrease in later periods aligns with a widened margin of retained earnings after tax. These mixed trends highlight a period of operational strength followed by moderation and cautious financial management.

Net Profit Margin

The net profit margin demonstrated an overall increase from 11.13% at the start of the period to a peak of 20.79% in the first quarter of 2022. This was followed by a steady decline, reaching a low of 6.97% in the first quarter of 2024. Subsequently, the margin showed signs of stabilization with moderate fluctuations, settling around the 7-8% range toward the end of the timeline. The initial growth phase suggests improved profitability, but the pronounced decrease thereafter indicates pressures on earnings or increased costs affecting the company's bottom line.

Asset Turnover

The asset turnover ratio exhibited a general upward trend from 0.37 in the first quarter of 2021 to approximately 0.5 by the first quarter of 2022, indicating more efficient use of assets to generate sales during this period. After this peak, the ratio slightly declined and stabilized around the 0.44 to 0.46 range in subsequent quarters. This relatively stable performance after the peak suggests consistent operational efficiency, albeit without further significant improvement.

Return on Assets (ROA)

Return on assets increased substantially from 4.14% in the first quarter of 2021 to a high of 10.47% in the first quarter of 2022, mirroring the trend observed in net profit margin and asset turnover. After this peak, ROA declined progressively to a low of approximately 3.06% by the first quarter of 2024. In the following periods, ROA showed a mild recovery and fluctuated around the 3-4% range. The pattern reflects a period of enhanced profitability and asset utilization followed by a weakening performance and partial recovery towards the end.

Tax Burden

The Tax Burden ratio exhibited a gradual increasing trend from early 2021, rising from 0.56 in the first quarter of 2021 to a peak of approximately 0.66 by the first half of 2022. Following this peak, the ratio experienced a consistent decline, reaching its lowest values around 0.41 to 0.45 from 2024 into 2025. This pattern suggests an initial increase in the effective tax rate impact followed by a notable reduction in tax expenses relative to profit before tax in the later periods.

Interest Burden

The Interest Burden ratio showed an overall positive trend, improving from 0.84 in the first quarter of 2021 to levels near 0.93-0.94 during the last recorded periods in 2025. The steady increase implies an enhancement in operating income before interest expense relative to operating income before tax, reflecting better interest cost management or lower interest expenses over time.

EBIT Margin

The EBIT Margin percentage experienced a rise from 23.82% in early 2021 to a higher range peaking over 34% by early 2022, indicating improved operating profitability. However, after this peak, there was a gradual decline to the 18%-20% range through to the end of 2024 and early 2025. The decline reflects worsening operating margins, possibly due to higher costs or reduced pricing power, though the margin remains positive and fairly stable in the latter periods.

Asset Turnover

The Asset Turnover ratio increased from a low of 0.37 in Q1 2021 to approximately 0.5 in early 2022, indicating more efficient use of assets to generate revenue. Post-2022, this ratio exhibited slight fluctuations but remained relatively stable around 0.44 to 0.46 through to 2025. This consistency highlights steady asset utilization efficiency after initial improvements.

Return on Assets (ROA)

Return on Assets demonstrated a strong upward trajectory early on, rising from 4.14% in the first quarter of 2021 to an impressive high of 10.47% by Q1 2022. Subsequently, ROA declined steadily, eventually falling to a range of approximately 3% to 3.7% in the periods from late 2023 through 2025. This trend suggests that despite improved profitability and asset turnover early in the period, the company experienced diminishing effectiveness in generating returns from its assets in later years.

The analysis of the quarterly financial data reveals several notable trends across the key profitability and burden ratios over the observed periods.

Tax Burden

The tax burden ratio exhibits an overall declining trend from the beginning of the period toward the end. Initially, the ratio increases gradually from around 0.56 to a peak approximately at 0.66, indicating a higher proportion of earnings absorbed by taxes. Subsequently, the ratio declines steadily, reaching values below 0.45 in the later periods, suggesting a lower tax impact on earnings in recent quarters.

Interest Burden

The interest burden ratio remains relatively stable throughout the periods, consistently staying above 0.84. There is a slight upward movement observed from approximately 0.84 to around 0.94, indicating improving efficiency in managing interest expenses relative to earnings before interest and taxes, which benefits net profitability.

EBIT Margin

The EBIT margin percentage shows a fluctuating but generally downward trend over the analyzed quarters. The margin peaks near 34% in early 2022 but then declines progressively to values below 20% toward the latest reported periods. This decline indicates a reduction in operating profitability relative to revenue, potentially reflecting increased operating costs or pressure on sales prices.

Net Profit Margin

Net profit margin follows a pattern similar to the EBIT margin but shows a more pronounced decrease over time. Beginning at approximately 11% and increasing to nearly 21% early in the data series, the margin subsequently falls sharply, settling below 8% in recent quarters. This reduction in net profitability could be a combined effect of decreased operational efficiency, tax burden fluctuations, and other non-operating factors.

In summary, the data indicate that while interest expense management remains stable or improves slightly, the company experiences a notable decline in both operational and net profitability margins. The decreasing tax burden toward the latter periods somewhat offsets this trend but is insufficient to fully counteract the overall margin compressions. Monitoring the causes behind the falling EBIT and net profit margins would be essential for future financial health assessments.