================================================================================
                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


                      For the quarter ended March 31, 1997

                           Commission file number 1-82


                            PHELPS DODGE CORPORATION

                            (a New York corporation)


                                   13-1808503

                      (I.R.S. Employer Identification No.)


                 2600 N. Central Avenue, Phoenix, AZ 85004-3089


                  Registrant's telephone number: (602) 234-8100


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. Yes x No .

Number of Common Shares outstanding at May 9, 1997:  61,923,355 shares.

================================================================================
<PAGE>
                            PHELPS DODGE CORPORATION

                          QUARTERLY REPORT ON FORM 10-Q

                      FOR THE QUARTER ENDED MARCH 31, 1997



                                Table of Contents
                                -----------------

Part I.  Financial Information

      Item 1.  Financial Statements
         Statement of Consolidated Income
         Consolidated Balance Sheet
         Consolidated Statement of Cash Flows
         Consolidated Statement of Common Shareholders' Equity
         Notes to Consolidated Financial Information
         Review by Independent Accountants
         Report of Independent Accountants on Review of Interim
           Financial Information

      Item 2.  Management's Discussion and Analysis
         Results of Operations
         Results of Phelps Dodge Mining Company
         Results of Phelps Dodge Industries
         Other Matters Relating to the Statement of Consolidated Income
         Changes in Financial Condition

Part II.  Other Information

      Item 1.  Legal Proceedings

      Item 6.  Exhibits and Reports on Form 8-K

      Signatures

      Index to Exhibits
<PAGE>
                    PHELPS DODGE CORPORATION AND SUBSIDIARIES

                          Part I. Financial Information

Item 1. Financial Statements

STATEMENT OF CONSOLIDATED INCOME
(Unaudited; in millions except per share data)

                                                            First Quarter
                                                            -------------
                                                            1997         1996
                                                            ----         ----

SALES AND OTHER OPERATING REVENUES                       $ 1,021.7      1,004.7
                                                         ---------     --------
OPERATING COSTS AND EXPENSES
   Cost of products sold                                     695.9        664.5
   Depreciation, depletion and amortization                   68.9         61.2
   Selling and general administrative expense                 33.7         30.5
   Exploration and research expense                           17.2         18.7
                                                         ---------     --------
                                                             815.7        774.9
                                                         ---------     --------
OPERATING INCOME                                             206.0        229.8
   Interest expense                                          (16.4)       (17.2)
   Capitalized interest                                        2.5          0.2
   Miscellaneous income and expense, net                       9.9         15.0
                                                         ---------     --------
INCOME BEFORE TAXES, MINORITY INTERESTS AND
 EQUITY IN NET EARNINGS OF AFFILIATED COMPANIES              202.0        227.8
   Provision for taxes on income                             (64.6)       (72.9)
   Minority interests in consolidated
    subsidiaries                                              (2.3)        (3.4)
   Equity in net earnings of affiliated
    companies                                                  2.4          1.6
                                                         ---------     --------
NET INCOME                                               $   137.5        153.1
                                                         =========     ========

EARNINGS PER SHARE                                       $    2.12         2.26
                                                         =========     ========

AVERAGE NUMBER OF SHARES OUTSTANDING                          64.7         67.8

See Notes to Consolidated Financial Information.
<PAGE>
BUSINESS SEGMENTS
(Unaudited; in millions)
                                                            First Quarter
                                                            -------------
                                                          1997           1996
                                                          ----           ----

SALES AND OTHER OPERATING REVENUES
   Phelps Dodge Mining Company                          $  590.3          584.6
   Phelps Dodge Industries                                 431.4          420.1
                                                        --------        -------
                                                        $1,021.7        1,004.7
                                                        ========        =======
OPERATING INCOME (LOSS)
   Phelps Dodge Mining Company                          $  171.8          184.6
   Phelps Dodge Industries                                  45.3           54.4
   Corporate and other                                     (11.1)          (9.2)
                                                        --------        -------
                                                        $  206.0          229.8
                                                        ========        =======

See Notes to Consolidated Financial Information.
<PAGE>
CONSOLIDATED BALANCE SHEET
(Unaudited; in millions)
                                                          March 31, December 31,
                                                            1997         1996
                                                            ----         ----
ASSETS
  Cash and short-term investments, at cost                $  422.0        470.1
  Accounts receivable, net                                   523.6        489.1
  Inventories                                                297.7        293.0
  Supplies                                                   119.3        117.0
  Prepaid expenses                                            19.1          6.1
  Deferred income taxes                                       46.2         46.2
                                                          --------      -------
     Current assets                                        1,427.9      1,421.5
  Investments and long-term accounts receivable               90.9         86.4
  Property, plant and equipment, net                       3,074.8      3,020.5
  Other assets and deferred charges                          285.0        288.0
                                                          --------      -------
                                                          $4,878.6      4,816.4
                                                          ========      =======

LIABILITIES
  Short-term debt                                         $   62.9         66.5
  Current portion of long-term debt                           51.7         38.2
  Accounts payable and accrued expenses                      581.9        564.9
  Income taxes                                                57.8         16.3
                                                          --------      -------
     Current liabilities                                     754.3        685.9
  Long-term debt                                             531.8        554.6
  Deferred income taxes                                      442.4        424.9
  Other liabilities and deferred credits                     307.8        309.6
                                                          --------      -------
                                                           2,036.3      1,975.0
                                                          --------      -------
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES               87.6         85.5
                                                          --------      -------
COMMON SHAREHOLDERS' EQUITY
  Common shares, 63.4 outstanding
   (12/31/96 - 64.7)                                         396.5        404.4
  Retained earnings                                        2,475.9      2,465.0
  Cumulative translation adjustments                        (103.6)       (98.8)
  Other                                                      (14.1)       (14.7)
                                                          --------      -------
                                                           2,754.7      2,755.9
                                                          --------      -------
                                                          $4,878.6      4,816.4
                                                          ========      =======

See Notes to Consolidated Financial Information.
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited; in millions)

                                                                Three months
                                                                   ended
                                                                  March 31,
                                                               --------------
                                                              1997        1996
                                                              ----        ----
OPERATING ACTIVITIES
 Net income                                                 $ 137.5       153.1
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Depreciation, depletion and amortization                    68.9        61.2
   Deferred income taxes                                       18.2        22.8
   Equity earnings net of dividends received                   (2.0)       (1.6)
   Changes in current assets and liabilities:
    (Increase) decrease in accounts receivable                (37.4)      (59.7)
    (Increase) decrease in inventories                         (6.1)       16.9
    (Increase) decrease in supplies                            (2.6)        3.2
    (Increase) decrease in prepaid expenses                   (14.0)       (7.2)
    (Increase) decrease in deferred income taxes               (0.1)        0.7
    Increase (decrease) in interest payable                     3.6         4.0
    Increase (decrease) in other accounts
     payable                                                   15.2        (8.4)
    Increase (decrease) in income taxes                        41.5        40.8
    Increase (decrease) in other accrued
     expenses                                                  (0.6)       (8.1)
   Other adjustments, net                                       1.3         4.2
                                                            -------      ------
     Net cash provided by operating activities                223.4       221.9
                                                            -------      ------
INVESTING ACTIVITIES
 Capital outlays                                             (122.7)      (99.0)
 Capitalized interest                                          (2.5)       (0.2)
 Investment in subsidiaries                                     0.3         --
 Proceeds from asset dispositions and other                     1.1         0.6
                                                            -------      ------
     Net cash used in investing activities                   (123.8)      (98.6)
                                                            -------      ------
FINANCING ACTIVITIES
 Increase in debt                                               --          5.0
 Payment of debt                                              (11.6)       (4.3)
 Common dividends                                             (32.3)      (30.3)
 Purchase of common shares                                   (109.3)     (129.3)
 Other, net                                                     5.5        10.6
                                                            -------      ------
 Net cash used in financing activities                       (147.7)     (148.3)
                                                            -------      ------
 DECREASE IN CASH AND SHORT-TERM INVESTMENTS                  (48.1)      (25.0)

CASH AND SHORT-TERM INVESTMENTS AT
 BEGINNING OF PERIOD                                          470.1       608.5
                                                            -------      ------
CASH AND SHORT-TERM INVESTMENTS AT END
 OF PERIOD                                                  $ 422.0       583.5
                                                            =======      ======

See Notes to Consolidated Financial Information.
<PAGE>
CONSOLIDATED STATEMENT OF COMMON SHAREHOLDERS' EQUITY
(Unaudited; in millions)


                        Common Shares                  Cumulative
                      -----------------                Translation
                       Number                          Adjustments    Common
                         of      At Par     Retained       and     Shareholders'
                       shares     Value     Earnings      Other       Equity
                       ------     -----     --------      -----       -------
Balance at
 December 31, 1996      64.7     $ 404.4    $ 2,465.0   $ (113.5)   $ 2,755.9
  Stock options
   exercised             0.2         1.3          5.8                     7.1
  Common shares
   purchased            (1.5)       (9.2)      (100.1)                 (109.3)
  Net income                                    137.5                   137.5
  Dividends on common
   shares                                       (32.3)                  (32.3)
  Translation
   adjustment                                               (4.8)        (4.8)
  Other                                                      0.6          0.6
                       -----     -------    ---------   ---------   ---------
Balance at
 March 31, 1997         63.4     $ 396.5    $ 2,475.9   $ (117.7)   $ 2,754.7
                       =====     =======    =========   =========   =========

See Notes to Consolidated Financial Information.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)

1.       The unaudited  consolidated  financial information presented herein has
         been prepared in accordance with the instructions to Form 10-Q and does
         not include all of the  information  and note  disclosures  required by
         generally accepted accounting principles.  Therefore,  this information
         should  be  read  in  conjunction  with  the   consolidated   financial
         statements and notes thereto  included in the  Corporation's  Form 10-K
         for the year ended  December 31, 1996.  This  information  reflects all
         adjustments that are, in the opinion of management, necessary to a fair
         statement of the results for the interim periods reported.

2.       The results of operations  for the  three-month  period ended March 31,
         1997, are not necessarily  indicative of the results to be expected for
         the full year.

3.       Depending on market  circumstances,  the Corporation  may  periodically
         purchase or liquidate  various copper price protection  contracts for a
         portion of its expected  future mine production to mitigate the risk of
         adverse price  fluctuations.  The  Corporation  currently has no copper
         price  protection  contracts  in place.  Contracts  covering 85 million
         pounds of first quarter 1997 copper cathode expired without payment.

         During the 1996 third quarter, the Corporation  liquidated a portion of
         its copper price  protection  contracts that covered  anticipated  mine
         production in the first quarter of 1997.  Consequently,  a $6.8 million
         gain was recognized in pre-tax income during the 1997 first quarter.

4.       The effect of the  implementation of Statement of Financial  Accounting
         Standards  No. 128,  "Earnings per Share," would be immaterial on a pro
         forma basis for the  calculation  of  earnings  per share for the first
         quarter of 1997.


REVIEW BY INDEPENDENT ACCOUNTANTS

         The financial information as of March 31, 1997, and for the three-month
periods ended March 31, 1997 and 1996, included in Part I pursuant to Rule 10-01
of Regulation S-X has been reviewed by Price Waterhouse LLP (Price  Waterhouse),
the  Corporation's   independent  accountants,   in  accordance  with  standards
established by the American  Institute of Certified  Public  Accountants.  Price
Waterhouse's report is included in this quarterly report.

         Price Waterhouse does not carry out any significant or additional audit
tests  beyond  those that would have been  necessary  if its report had not been
included in this quarterly report. Accordingly, such report is not a "report" or
"part of a  registration  statement"  within the meaning of Sections 7 and 11 of
the  Securities  Act of 1933 and the liability  provisions of Section 11 of such
Act do not apply.
<PAGE>
<AUDIT-REPORT>
                              PRICE WATERHOUSE LLP
                        REPORT OF INDEPENDENT ACCOUNTANTS



To the Board of Directors and Shareholders of the
  Phelps Dodge Corporation



We have  reviewed the  accompanying  consolidated  balance sheet of Phelps Dodge
Corporation  and its  subsidiaries  as of March  31,  1997 and the  consolidated
statements of income, of cash flows and of common  shareholders'  equity for the
three-month  periods ended March 31, 1997 and 1996.  These financial  statements
are the responsibility of the Corporation's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and making  inquiries of persons  responsible  for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression of an opinion  regarding the financial  statements  taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the consolidated  financial  statements referred to above for them to
be in conformity with generally accepted accounting principles.

We previously audited in accordance with generally accepted auditing  standards,
the  consolidated  balance  sheet  as of  December  31,  1996,  and the  related
consolidated  statements  of income,  of cash flows and of common  shareholders'
equity for the year then ended (not presented  herein),  and in our report dated
January 15,  1997,  we expressed an  unqualified  opinion on those  consolidated
financial  statements.  In  our  opinion,  the  information  set  forth  in  the
accompanying  consolidated balance sheet information as of December 31, 1996, is
fairly stated in all material  respects in relation to the consolidated  balance
sheet from which it has been derived.


Price Waterhouse LLP



Phoenix, Arizona
April 9, 1997
</AUDIT-REPORT>

<PAGE>
Item 2.  Management's Discussion and Analysis

RESULTS OF OPERATIONS

         Phelps Dodge Corporation had consolidated net income of $137.5 million,
or $2.12 per common share,  in the first  quarter of 1997,  compared with $153.1
million, or $2.26 per common share, in the 1996 first quarter.

         Earnings were lower in the 1997 first quarter than in the corresponding
1996 period principally as a result of lower average copper prices. Average spot
prices per pound of cathode  copper on the New York Commodity  Exchange  (COMEX)
were  approximately 7 cents per pound, or 6 percent,  lower in the first quarter
of 1997 than the average prices in the corresponding  1996 period. The effect of
this price  decrease  was offset in part by higher  volumes of copper  sold from
mine production.

         Any material change in the price the  Corporation  receives for copper,
or in its unit production  costs, has a significant  effect on the Corporation's
results.  The Corporation's  present share of annual production is approximately
1.6 billion pounds of copper.  Accordingly,  each 1 cent per pound change in the
average  annual copper price received by the  Corporation,  or in average annual
unit  production  costs,  causes a variation in annual  operating  income before
taxes of approximately $16 million.

         The  COMEX  spot  price per pound of  copper  cathode,  upon  which the
Corporation  bases its selling price,  averaged $1.11 in the 1997 first quarter,
compared  with $1.18 in the  corresponding  1996 period.  From April 1 to May 9,
1997, the COMEX price averaged $1.10 per pound, closing at $1.12 on May 9, 1997.

         Depending on market  circumstances,  the Corporation  may  periodically
purchase or liquidate various copper price protection contracts for a portion of
its  expected  future  mine  production  to mitigate  the risk of adverse  price
fluctuations.  For a  further  discussion  of  the  Corporation's  copper  price
protection  arrangements  for 1997  production,  see Note 3 to the  Consolidated
Financial Information.

         Sales were $1,021.7  million in the 1997 first  quarter,  compared with
$1,004.7 million in the  corresponding  1996 period.  This increase  principally
resulted  from greater  sales volumes of copper and from higher sales volumes in
the wire and cable business, which were partially offset by lower average copper
prices and lower sales volumes of wheels and rims and specialty chemicals.


RESULTS OF PHELPS DODGE MINING COMPANY

         Phelps Dodge Mining Company is an international  business  comprising a
group of companies involved in vertically integrated copper operations including
mining,  concentrating,  electrowinning,  smelting and refining, rod production,
marketing and sales, and related activities.  Copper is sold primarily to others
as rod,  cathode  or  concentrates,  and as rod to the Phelps  Dodge  Industries
segment.  In addition,  Phelps Dodge Mining  Company at times smelts and refines
copper and produces  copper rod for others on a toll basis.  Phelps Dodge Mining
Company  also  produces  gold,  silver,   molybdenum  and  copper  chemicals  as
by-products,  and sulfuric acid from its air quality  control  facilities.  This
segment also includes the Corporation's  other mining operations and investments
(including  fluorspar,  silver,  lead and  zinc  operations)  and its  worldwide
mineral exploration and development programs.
<PAGE>
================================================================================
                                                               First Quarter
                                                               -------------
                                                             1997          1996
                                                             ----          ----

Copper production (short tons):
  Total production                                         235,300       231,400
  Less minority participants' shares *                      40,700        41,200
                                                           -------       -------
  Net Phelps Dodge share                                   194,600       190,200
                                                           =======       =======
Copper sales (short tons):
  Net Phelps Dodge share from own mines                    192,800       190,400
  Purchased copper                                          73,100        62,100
                                                           -------       -------
  Total copper sales                                       265,900       252,500
                                                           =======       =======
New York Commodity Exchange
  average spot price per
  pound - copper cathodes                                     1.11          1.18

                                                                (in millions)

Sales and other operating revenues                           590.3         584.6
Operating income                                             171.8         184.6
---------------------

*        Minority  participant  interests  include  (i) a 15  percent  undivided
         interest  in the  Morenci,  Arizona,  copper  mining  complex  held  by
         Sumitomo  Metal  Mining  Arizona,  Inc.,  (ii) a one-third  partnership
         interest in Chino Mines  Company in New Mexico held by Heisei  Minerals
         Corporation, and (iii) a 20 percent interest in Candelaria held by SMMA
         Candelaria,  Inc., a jointly owned  subsidiary of Sumitomo Metal Mining
         Co., Ltd. and Sumitomo Corporation.

================================================================================
<PAGE>
         Phelps Dodge Mining  Company's  sales of copper in the first quarter of
1997  increased by 13,400 tons, or 5 percent,  compared  with the  corresponding
1996 period. This sales volume increase,  which principally  consisted of copper
purchased  for  resale,  was  offset  for the most  part by a 7 cents  per pound
decrease in average  copper prices in the 1997 first  quarter  compared with the
year-earlier  period.  Resulting sales and other operating revenues in the first
quarter  of 1997 were  $590.3  million,  or 1 percent  higher  than those in the
corresponding 1996 period.

         Phelps Dodge Mining Company recorded operating income of $171.8 million
in the 1997 first  quarter,  compared with $184.6  million in the  corresponding
1996 period.  This decrease primarily  reflected the lower average copper prices
and modestly  higher copper  production  costs,  which were partially  offset by
slightly  higher volumes of copper sold from mine  production.  Copper sold from
mine  production  increased by 2,400 tons,  or 1 percent,  over that sold in the
corresponding  1996  period.   Higher  1997  copper  production  costs  resulted
principally from increased  depreciation rates, slightly higher energy costs and
lower by-product credits from precious metals.

         The  collective  bargaining   agreements  covering   approximately  625
employees  at Phelps  Dodge  Mining  Company's  Chino  operations  in New Mexico
expired on June 30, 1996.  As of May 9, 1997,  employees who were covered by the
agreements have continued to work without a contract.

         On May 7, 1997, the Corporation announced plans to resume production at
its Ajo copper  mine in  southern  Arizona  where  mining  operations  have been
suspended  since  1984.  Construction  of a $238  million  modernization  of the
facility  is  scheduled  to  begin  in  early  1998,   pending   completion   of
environmental  permitting,  with commercial production expected to begin as soon
as late 1999.  When  operating  at full  capacity,  Ajo is  expected  to add 135
million pounds of copper to the Corporation's annual production.

         On May 6, 1997, the Corporation  acquired an indirect 40 percent voting
interest,  representing an indirect 26.67 percent economic interest, in Compania
San Ignacio de  Morococha  S.A.,  a leading  Peruvian  zinc mining  company that
annually produces approximately 130 million pounds of zinc.


RESULTS OF PHELPS DODGE INDUSTRIES

         Phelps Dodge  Industries  is a business  segment  comprising a group of
companies   that   manufacture   engineered   products   principally   for   the
transportation,  energy and telecommunications sectors worldwide. Its operations
are  characterized  by products with significant  market share,  internationally
competitive cost and quality,  and specialized  engineering  capabilities.  This
business  segment  includes the  Corporation's  specialty  chemicals  operations
through  Columbian  Chemicals  Company and its  subsidiaries;  its wheel and rim
operations through Accuride  Corporation and its subsidiaries;  and its wire and
cable and specialty  conductor  operations  through  Phelps Dodge  International
Corporation  and Phelps  Dodge Magnet Wire  Company and their  subsidiaries  and
affiliates.
<PAGE>

================================================================================

                                                               First Quarter
                                                               --------------

                                                             1997          1996
                                                             ----          ----
                                                                (in millions)

Sales and other operating revenues:
  Specialty chemicals                                      $ 108.7         112.4
  Wheels and rims                                             81.5          82.8
  Wire and cable                                             241.2         224.9
                                                           -------        ------
                                                           $ 431.4         420.1
                                                           =======        ======
Operating income:
  Specialty chemicals                                      $  17.2          21.2
  Wheels and rims                                              6.1          11.0
  Wire and cable                                              22.0          22.2
                                                           -------        ------
                                                           $  45.3          54.4
                                                           =======        ======

================================================================================

         Phelps Dodge  Industries'  sales of $431.4 million in the first quarter
of 1997 were slightly higher than those in the corresponding 1996 period. Higher
sales  volumes  in the wire and  cable and North  American  specialty  chemicals
businesses  were offset in part by lower sales  volumes in the wheel and rim and
European specialty chemicals businesses.

         Phelps Dodge Industries reported 1997 first quarter operating income of
$45.3 million compared with $54.4 million in the corresponding  1996 period. The
decrease primarily was due to lower sales volumes of specialty  chemicals in the
European   market  and  the  effects  of  a  recently   settled  strike  at  the
Corporation's London,  Ontario,  wheel and rim plant. The strike, which began on
January 21, 1997, was settled on March 15, 1997.

         On May 1, 1997,  Accuride  Corporation and Kaiser Aluminum and Chemical
Corporation  (Kaiser) formed a joint venture company to produce  aluminum wheels
for the  commercial  transportation  industry.  Accuride  and Kaiser each own 50
percent of the new company.

         The  collective   bargaining   agreement  covering   approximately  360
employees at Phelps Dodge Magnet Wire Company's  Hopkinsville,  Kentucky,  plant
expired on October 11, 1996.  As of May 9, 1997,  employees  who were covered by
the agreement have continued to work without a contract.
 <PAGE>
OTHER MATTERS RELATING TO THE STATEMENT OF CONSOLIDATED INCOME

         Miscellaneous income and expense, net, decreased by $5.1 million, or 34
percent,  in the 1997 first quarter compared with the corresponding 1996 period.
This  change  principally   reflected   decreased  interest  income  from  lower
short-term  investments  and less dividend  income from the  Corporation's  13.9
percent minority interest in Southern Peru Copper Corporation.


CHANGES IN FINANCIAL CONDITION

         Capital  outlays  during the 1997 first  quarter were $94.5 million for
Phelps Dodge Mining  Company,  including  $47.3 million for the expansion of the
Corporation's  Candelaria mining operations in Chile. Capital outlays were $27.3
million for Phelps Dodge Industries.  Capital outlays in the corresponding  1996
period were $65.4 million for Phelps Dodge Mining  Company and $33.2 million for
Phelps Dodge  Industries.  The Corporation  expects capital outlays for the year
1997 to be approximately $500 million for Phelps Dodge Mining Company (including
approximately $175 million for the Candelaria  expansion project).  Phelps Dodge
Industries is expected to spend approximately $200 million during the year.

         At March 31, 1997,  the  Corporation's  total debt was $646.4  million,
compared with $659.3 million at year-end 1996. The  Corporation's  ratio of debt
to total  capitalization was 18.5 percent at March 31, 1997,  compared with 18.8
percent at December 31, 1996.

         On March 10, 1997, the Corporation paid a regular quarterly dividend of
50 cents per share on its common  shares for the 1997 first  quarter;  the total
amount paid was $32.3 million. On May 7, 1997, the Board of Directors declared a
1997 second quarter regular  dividend of 50 cents per common share. The dividend
is to be paid on June 10,  1997,  to  shareholders  of  record  at the  close of
business on May 20, 1997.  There were  63,438,000  common shares  outstanding at
March 31, 1997.

         In 1997 through May 6, the  Corporation  purchased a total of 2,948,000
of its common shares at a total cost of $218.6  million.  These  purchases  were
made under a 5 million  share  purchase  program that was  initiated in 1995 and
extended  to 10  million  shares in 1996.  Under  that  program,  a total of 9.9
million shares were purchased by the Corporation.

         On May 7, 1997, the  Corporation  announced that its Board of Directors
had  authorized  the  purchase  of up to an  additional  6 million of its common
shares.  The Corporation will make purchases in the open market as circumstances
warrant  and will  also  consider  purchasing  shares  in  privately  negotiated
transactions.
<PAGE>
                           Part II. Other Information


Item 1.  Legal Proceedings

         I. Reference is made to Paragraph II, section  A.2.(a) of Item 3, Legal
Proceedings of the Corporation's Form 10-K for the year ended December 31, 1996,
regarding In re the General  Adjudication of All Rights to Use Water in the Gila
River System and Source,  Nos. W-1 (Salt River),  W-2 (Verde  River),  W-3 (Gila
River) and W-4 (San Pedro River) (Superior Court of Arizona, Maricopa County).

         On April 29, 1997, the Committee on Indian Affairs of the United States
Senate held a hearing concerning  possible extension of the federal  legislation
authorizing settlement of the San Carlos Apache Tribe's water rights claims with
the  Corporation and the other parties to the  proceeding.  Such  legislation is
currently  scheduled to expire on June 30, 1997. The Tribe refused to attend the
hearing.

         It has been publicly reported that the Tribe has filed a suit in tribal
court  seeking  both  eviction  of the  Corporation  from  the  reservation  and
substantial monetary damages.

         The Corporation believes that it holds valid rights sufficient to allow
for its current use of the  reservation  lands and that its right of way for the
Black River pump station may be terminated only by the Secretary of the Interior
for cause. Nonetheless,  the Corporation is working to develop alternative water
resources for Morenci and is examining the difficult  technical and legal issues
relating to the feasibility of implementing and constructing  alternative  water
transportation systems.


Item 6.  Exhibits and Reports on Form 8-K

         (a) Any exhibits  required to be filed by the Corporation are listed in
the Index to Exhibits.

         (b) No  reports on Form 8-K were  filed by the  Corporation  during the
quarter ended March 31, 1997.
<PAGE>
                                   SIGNATURES






         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Corporation  has duly  caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.




                                             PHELPS DODGE CORPORATION
                                             ------------------------
                                            (Corporation or Registrant)




Date:   May 12, 1997                         By: Gregory W. Stevens
                                                 ------------------
                                                 Gregory W. Stevens
                                        Vice President and Controller
                                        (Principal Accounting Officer)


                    PHELPS DODGE CORPORATION AND SUBSIDIARIES

                                Index to Exhibits



12       Computation of ratios of total debt to total capitalization.



15       Letter from Price  Waterhouse  LLP with  respect to  unaudited  interim
         financial information.