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                                  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, 1998

                           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 12, 1998:  58,671,000 shares.

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<PAGE>
                            PHELPS DODGE CORPORATION

                          QUARTERLY REPORT ON FORM 10-Q

                      FOR THE QUARTER ENDED MARCH 31, 1998



                                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 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)

<TABLE>
<CAPTION>
                                                               First Quarter
                                                             ----------------
                                                             1998        1997
                                                             ----        ----
<S>                                                        <C>          <C>    
SALES AND OTHER OPERATING REVENUES                         $  798.3     1,021.7
                                                           --------    --------
OPERATING COSTS AND EXPENSES
   Cost of products sold                                      590.4       695.9
   Depreciation, depletion and amortization                    73.5        68.9
   Selling and general administrative expense                  33.8        33.7
   Exploration and research expense                            12.9        17.2
   Gain on asset disposition                                 (186.2)       --
                                                           --------    --------
                                                              524.4       815.7
                                                           --------    --------
OPERATING INCOME                                              273.9       206.0
   Interest expense                                           (21.7)      (16.4)
   Capitalized interest                                         0.5         2.5
   Miscellaneous income and expense, net                        6.3         9.9
                                                           --------    --------
INCOME BEFORE TAXES, MINORITY INTERESTS AND
 EQUITY IN NET EARNINGS OF AFFILIATED COMPANIES               259.0       202.0
   Provision for taxes on income                              (93.9)      (64.6)
   Minority interests in consolidated
    subsidiaries                                               (2.4)       (2.3)
   Equity in net earnings of affiliated
    companies                                                   1.0         2.4
                                                           --------    --------
NET INCOME                                                 $  163.7       137.5
                                                           ========    ========
BASIC EARNINGS PER SHARE                                   $   2.80        2.14
                                                           ========    ========
DILUTED EARNINGS PER SHARE                                 $   2.79        2.13
                                                           ========    ========
AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC                   58.4        64.2

AVERAGE NUMBER OF SHARES OUTSTANDING - DILUTED                 58.7        64.6
</TABLE>

See Notes to Consolidated Financial Information.
<PAGE>
BUSINESS SEGMENTS
(Unaudited; in millions)
<TABLE>
<CAPTION>
                                                              First Quarter
                                                          ---------------------
                                                            1998         1997
                                                          --------     --------
<S>                                                       <C>           <C>  
SALES AND OTHER OPERATING REVENUES
   Phelps Dodge Mining Company                            $  441.2        590.3
   Phelps Dodge Industries                                   357.1        431.4
                                                          --------     --------
                                                          $  798.3      1,021.7
                                                          ========     ========
OPERATING INCOME (LOSS)
   Phelps Dodge Mining Company                            $   54.6        171.8
   Phelps Dodge Industries (see Note 4)                      231.2         45.3
   Corporate and other                                       (11.9)       (11.1)
                                                          --------     --------
                                                          $  273.9        206.0
                                                          ========     ========
</TABLE>

See Notes to Consolidated Financial Information.
<PAGE>
CONSOLIDATED BALANCE SHEET
(Unaudited; in millions)
<TABLE>
<CAPTION>
                                                        March 31,   December 31,
                                                          1998          1997
                                                          ----          ----
<S>                                                     <C>           <C>  
ASSETS                                                             
  Cash and cash equivalents                             $  392.9        157.9
  Accounts receivable, net                                 411.1        420.5
  Inventories                                              279.5        297.8
  Supplies                                                 114.7        115.1
  Prepaid expenses                                          12.5          7.8
  Deferred income taxes                                     51.3         52.0
                                                        --------     --------
     Current assets                                      1,262.0      1,051.1
  Investments and long-term accounts receivable            105.0        131.8
  Property, plant and equipment, net                     3,530.4      3,445.1
  Other assets and deferred charges                        244.5        337.2
                                                        --------     --------
                                                        $5,141.9      4,965.2
                                                        ========     ========
                                                                   
LIABILITIES                                                        
  Short-term debt                                       $   86.2         91.4
  Current portion of long-term debt                         63.9         54.8
  Accounts payable and accrued expenses                    476.7        553.2
  Income taxes                                              78.7          1.7
                                                        --------     --------
     Current liabilities                                   705.5        701.1
  Long-term debt                                           846.0        857.1
  Deferred income taxes                                    492.9        439.2
  Other liabilities and deferred credits                   328.6        344.1
                                                        --------     --------
                                                         2,373.0      2,341.5
                                                        --------     --------
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES            117.6        113.3
                                                        --------     --------
COMMON SHAREHOLDERS' EQUITY                                        
  Common shares, 58.7 outstanding                                  
   (12/31/97 - 58.6)                                       366.7        366.5
  Capital in excess of par value                             1.2         --
  Retained earnings                                       2435.1      2,301.0
  Accumulated other comprehensive income (loss)           (142.5)      (146.9)
  Other                                                     (9.2)       (10.2)
                                                        --------     --------
                                                         2,651.3      2,510.4
                                                        --------     --------
                                                        $5,141.9      4,965.2
                                                        ========     ========
</TABLE>

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

<TABLE>
<CAPTION>
                                                                 Three months
                                                                     ended
                                                                   March 31,
                                                                --------------
                                                                1998      1997
                                                                ----      ----
<S>                                                            <C>        <C>  
OPERATING ACTIVITIES
 Net income                                                    $163.7     137.5
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Depreciation, depletion and amortization                      73.5      68.9
   Deferred income taxes                                         12.5      18.2
   Equity earnings net of dividends received                     (1.0)     (2.0)
   Changes in current assets and liabilities:
    (Increase) decrease in accounts receivable                  (48.3)    (37.4)
    (Increase) decrease in inventories                           (7.0)     (6.1)
    (Increase) decrease in supplies                              (3.5)     (2.6)
    (Increase) decrease in prepaid expenses                      (5.0)    (14.0)
    (Increase) decrease in deferred income taxes                  0.8      (0.1)
    Increase (decrease) in interest payable                      13.6       3.6
    Increase (decrease) in other accounts
     payable                                                    (43.3)     15.2
    Increase (decrease) in income taxes                          78.4      41.5
    Increase (decrease) in other accrued
     expenses                                                     8.3      (0.6)
   Gain on asset disposition                                   (186.2)     --
   Other adjustments, net                                       (11.0)      1.3
                                                               ------    ------
     Net cash provided by operating activities                   45.5     223.4
                                                               ------    ------
INVESTING ACTIVITIES
 Capital outlays                                                (99.6)   (122.7)
 Capitalized interest                                            (0.5)     (2.5)
 Investment in subsidiaries                                    (116.0)      0.3
 Proceeds from asset dispositions and other                     440.5       1.1
                                                               ------    ------
     Net cash provided by (used in)
      investing activities                                      224.4    (123.8)
                                                               ------    ------
FINANCING ACTIVITIES
 Increase in debt                                                12.6      --
 Payment of debt                                                (19.0)    (11.6)
 Common dividends                                               (29.6)    (32.3)
 Purchase of common shares                                       --      (109.3)
 Other, net                                                       1.1       5.5
                                                               ------    ------
 Net cash used in financing activities                          (34.9)   (147.7)
                                                               ------    ------
 INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS                                                   235.0     (48.1)
CASH AND CASH EQUIVALENTS AT
 BEGINNING OF PERIOD                                            157.9     470.1
                                                               ------    ------
CASH AND CASH EQUIVALENTS AT END
 OF PERIOD                                                     $392.9     422.0
                                                               ======    ======
</TABLE>

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

<TABLE>
<CAPTION>
                           Common  Shares                                  Accumulated
                        -------------------                                  Other
                         Number                Capital in                 Comprehensive                  Common
                           of       At Par     Excess of      Retained       Income                   Shareholders'
                         shares     Value      Par Value      Earnings       (Loss)        Other         Equity
                        --------   --------   ------------    --------    ------------    --------    ------------
<S>                         <C>    <C>        <C>             <C>         <C>             <C>         <C>         
BALANCE AT
 DECEMBER 31, 1997          58.6   $  366.5   $         --    $2,301.0    $     (146.9)   $  (10.2)   $    2,510.4
  Stock options
   exercised                 0.1        0.2            1.5                                                     1.7
  Restricted shares
   issued, net                --         --           (0.5)                                    1.0             0.5
  Other investment 
   adjustments                                         0.2                                                     0.2
  Dividends on common
   shares                                                        (29.6)                                      (29.6)
  Comprehensive
   income:
     Net income                                                  163.7                                       163.7
     Other
      comprehensive
      income, net of
      tax:
       Translation
        adjustment                                                                 4.3                         4.3
       Unrealized
        gains on
        securities                                                                 0.1                         0.1
                                                                          ------------                ------------
       Other
        comprehensive
        income                                                                     4.4                         4.4
                                                                          ------------                ------------
     Comprehensive
      income                                                                                                 168.1
                        --------   --------   ------------    --------    ------------    --------    ------------
BALANCE AT
 MARCH 31, 1998             58.7   $  366.7   $        1.2    $2,435.1    $     (142.5)   $   (9.2)   $    2,651.3
                        ========   ========   ============    ========    ============    ========    ============
</TABLE>

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, 1997.  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,
         1998, 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 such
         copper price protection contracts in place.

4.       Effective  January 1, 1998, the Corporation  sold Accuride  Corporation
         and its subsidiaries,  its wheel and rim manufacturing  business, to an
         affiliate  of Kohlberg  Kravis  Roberts and Co.  (KKR) and the existing
         management of Accuride.  The Corporation retained a 10 percent interest
         in Accuride.  Under the terms of the sales  agreement,  the Corporation
         received  proceeds of $453.2  million  from KKR  resulting in a pre-tax
         gain of  approximately  $186.2 million  ($122.9 million after taxes, or
         $2.09 per common share).

5.       On February 3, 1998, the Corporation acquired the stock of Cobre Mining
         Company Inc. (Cobre) for $113.3 million  including  acquisition  costs.
         The Corporation also assumed Cobre's outstanding debt of $14.8 million.
         The  acquisition  was  at  a  price  of  $3.85  per  common  share  for
         substantially all of Cobre's 27 million common shares, including shares
         issuable  upon the exercise of  outstanding  warrants and options.  The
         primary assets of Cobre include the Continental  Mine,  which comprises
         an open-pit copper mine, two underground  copper mines,  two mills, and
         the surrounding 11,000 acres of land located in southwestern New Mexico
         adjacent to the Corporation's Chino operations.

6.       In the  1998  first  quarter,  the  Corporation  adopted  Statement  of
         Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive
         Income." The Corporation has presented the required  information in the
         Consolidated Statement of Common Shareholders' Equity. SFAS No. 130 has
         no  effect  on  the  Corporation's  results  of  operations,  financial
         position, capital resources or liquidity.

7.       On March 4,  1998,  and April 3,  1998,  respectively,  the  Accounting
         Standards  Executive Committee issued Statement of Position (SOP) 98-1,
         "Accounting  for the Costs of Computer  Software  Developed or Obtained
         for  Internal  Use" and SOP 98-5,  "Reporting  on the Costs of Start-Up
         Activities."  These  statements  become  effective  for fiscal  periods
         beginning after December 15, 1998. The Corporation will adopt both SOPs
         in 1999. The Corporation  does not expect either SOP to have a material
         effect on its results of operations or financial position.


REVIEW BY INDEPENDENT ACCOUNTANTS

         The financial information as of March 31, 1998, and for the three-month
periods ended March 31, 1998 and 1997, 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



April 13, 1998



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, 1998,  and the  consolidated
statements of income, of cash flows and of common  shareholders'  equity for the
three-month periods ended March 31, 1998 and 1997. This financial information is
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 information referred to above for it 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,  1997,  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,  1998,  except as to Note 2, which is as of  February  3, 1998,  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, 1997,  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
</AUDIT-REPORT>
<PAGE>
Item 2.  Management's Discussion and Analysis

RESULTS OF OPERATIONS

         Phelps Dodge  Corporation had consolidated  earnings for the 1998 first
quarter of $40.8 million,  or 70 cents per common share, before a non-recurring,
after-tax gain of $122.9  million,  or $2.09 per common share,  from the sale of
Accuride  Corporation,  Phelps Dodge's wheel and rim business.  Net income after
the non-recurring gain was $163.7 million, or $2.79 per common share. Net income
for the 1997 first quarter was $137.5 million, or $2.13 per common share.

         Earnings before non-recurring items were less in the 1998 first quarter
than in the corresponding  1997 period  principally as a result of lower average
copper  prices.  The average  spot price per pound of cathode  copper on the New
York Commodity  Exchange  (COMEX) was  approximately  34 cents per pound,  or 31
percent,  lower in the  first  quarter  of 1998  than the  average  price in the
corresponding  1997 period. The effect of this price decrease was offset in part
by an insurance  claim recovery of $11.5 million before taxes ($6.7 million,  or
11 cents per share,  after  taxes),  increased  volumes of copper sold from mine
production and decreased copper production costs.

         The  COMEX  spot  price per pound of  copper  cathode,  upon  which the
Corporation  bases  its  selling  price,  averaged  77 cents  in the 1998  first
quarter,  compared with $1.11 in the corresponding 1997 period.  From April 1 to
May 12, 1998, the COMEX price  averaged 81 cents per pound,  closing at 79 cents
on May 12, 1998.

         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  share of current annual production is approximately
1.8 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 $18 million.

         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 such copper price  protection
contracts in place.

         Sales were  $798.3  million in the 1998 first  quarter,  compared  with
$1,021.7 million in the  corresponding  1997 period.  This decrease  principally
resulted  from  lower  average   copper  prices  and  the  absence  of  Accuride
Corporation,  partially offset by higher sales volumes of copper,  carbon black,
and wire and cable products.


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.

================================================================================
<TABLE>
<CAPTION>
                                                                First Quarter
                                                                -------------
                                                                1998      1997
                                                                ----      ----
<S>                                                           <C>       <C>    
Copper production (short tons):
  Total production                                            263,800   235,300
  Less minority participants' shares *                         44,800    40,700
                                                              -------   -------
  Net Phelps Dodge share                                      219,000   194,600
                                                              =======   =======
Copper sales (short tons):
  Net Phelps Dodge share from own mines                       215,300   192,800
  Purchased copper                                             79,900    73,100
                                                              -------   -------
  Total copper sales                                          295,200   265,900
                                                              =======   =======
New York Commodity Exchange
  average spot price per
  pound - copper cathodes                                     $  0.77      1.11

                                                                 (in millions)

Sales and other operating revenues                            $ 441.2     590.3
Operating income                                              $  54.6     171.8
</TABLE>
---------------------

*        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  in Chile
         held by SMMA  Candelaria,  Inc., a jointly owned subsidiary of Sumitomo
         Metal Mining Co., Ltd. and Sumitomo Corporation.

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

         Phelps  Dodge  Mining  Company's  sales  and other  operating  revenues
decreased by $149.1 million,  or 25 percent,  in the 1998 first quarter compared
with the corresponding 1997 period.  This variance primarily reflected decreased
average  selling  prices for copper in the 1998 first  quarter that  resulted in
revenue  reductions of  approximately  $180 million.  Partially  offsetting that
price variance was a 29,300 ton, or 11 percent, increase in the volume of copper
sold in the 1998 first quarter.  This sales volume increase  principally was due
to greater  availability of Phelps Dodge mined copper  resulting from production
increases at the  Candelaria  mine in Chile,  the February 1998  acquisition  of
Cobre Mining  Company Inc.  (Cobre)  (see Note 5 to the  Consolidated  Financial
Information), and increased amounts of copper purchased for resale.

         Phelps Dodge Mining Company reported  operating income of $54.6 million
in the 1998 first  quarter,  compared with $171.8  million in the  corresponding
1997 period.  This decrease primarily reflected the lower average copper prices,
partially  offset by the higher volumes of copper sold from mine  production and
also  decreases in copper  production  costs.  Copper sold from mine  production
increased by 22,500 tons, or 12 percent, over first quarter 1997 production. The
production  increase was primarily due to the expansion of the  Candelaria  mine
completed in the 1997 fourth quarter,  and the acquisition of Cobre.  Lower 1998
copper  production costs were primarily due to the effect of the Candelaria mine
expansion,  but also reflected a portion of an insurance claim recovery  related
to 1993 flood damage at the Morenci, Arizona, operation.

         On May 1, 1998,  the  Corporation  announced  a proposal  to revise the
mining plan at its Chino Mines Company  (Chino) in New Mexico.  The revised mine
plan would reduce  Chino's  total mine  production  from  430,000  short tons of
material per day to 300,000 short tons per day, and result in the layoff of nine
salaried and 85 hourly  (union and  non-union)  employees.  The  proposal  would
curtail  production of copper  cathode at Chino by more than 100 million  pounds
over a three-year period.

         The Kafue Consortium,  of which Phelps Dodge is a part, submitted a bid
in 1997 to acquire the Nkana and Nchanga division of Zambia  Consolidated Copper
Mines Limited under the Zambian privatization  program. On April 2, 1998, Zambia
Consolidated   Copper  Mines  Limited   rejected  that  bid.  Since  that  time,
discussions between the two parties have continued.

         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 12, 1998,  employees who were covered by the
agreements have continued to work without a contract.



RESULTS OF PHELPS DODGE INDUSTRIES

         Phelps Dodge  Industries  is a business  segment  comprising a group of
companies  that  manufacture  engineered  products  principally  for the  global
energy, telecommunications,  transportation and specialty chemicals sectors. 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 wire and cable and  specialty  conductor  operations  through  Phelps  Dodge
International  Corporation  and  Phelps  Dodge  Magnet  Wire  Company  and their
subsidiaries and affiliates; and, until its sale, effective January 1, 1998, its
wheel and rim operations through Accuride Corporation and its subsidiaries.

================================================================================
<TABLE>
<CAPTION>
                                                                 First Quarter
                                                                ---------------
                                                                1998       1997
                                                                ----       ----
                                                                 (in millions)
<S>                                                            <C>         <C>  
Sales and other operating revenues:
  Specialty chemicals                                          $113.3      108.7
  Wheels and rims *                                              --         81.5
  Wire and cable                                                243.8      241.2
                                                               ------     ------
                                                               $357.1      431.4
                                                               ======     ======
Operating income:
  Specialty chemicals                                          $ 21.3       17.2
  Wheels and rims *                                             186.2        6.1
  Wire and cable                                                 23.7       22.0
                                                               ------     ------
                                                               $231.2       45.3
                                                               ======     ======
</TABLE>

*  Accuride  Corporation,  the  Corporation's  wheel and rim  business  was sold
effective  January 1, 1998,  resulting in a pre-tax gain of $186.2  million (see
Note 4 to the Consolidated Financial Information).

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

         Phelps Dodge Industries'  reported sales of $357.1 million in the first
quarter of 1998,  compared with $431.4 million in the corresponding 1997 period.
The decrease  principally  reflected  the effect of the sale of Accuride,  which
contributed sales of $81.5 million in the 1997 first quarter.

         Phelps Dodge Industries reported 1998 first quarter operating income of
$45.0 million  before a $186.2  million  pre-tax gain from the sale of Accuride,
compared with $45.3  million in the  corresponding  1997 period.  The 1998 first
quarter  operating income  approximated the 1997 operating  income,  despite the
absence of Accuride, principally due to higher sales volumes and lower feedstock
costs in the specialty chemicals business,  and higher sales volumes in the wire
and cable  business.  The new 60 percent  owned wire and cable joint  venture in
Brazil,  which was  acquired at the end of 1997,  contributed  to the 1998 first
quarter performance of Phelps Dodge Industries.

         At the end of March of this year,  commercial  production  commenced at
the Corporation's new $42 million magnet wire facility, Phelps Dodge Magnet Wire
de Mexico,  located in Monterrey,  Mexico. The 20,000 square-meter facility uses
state-of-the-art  technology  and has the capacity to produce 38,000 metric tons
of  magnet  wire  annually,  the  insulated  conductor  used in most  electrical
systems.

         The  collective   bargaining   agreement  covering   approximately  360
employees at Phelps Dodge Magnet Wire's Hopkinsville, Kentucky, plant expired on
October  11,  1996.  As of May 12,  1998,  employees  who  were  covered  by the
agreement have continued to work without a contract.


OTHER MATTERS RELATING TO THE STATEMENT OF CONSOLIDATED INCOME

         The Corporation's  1998 first quarter  exploration and research expense
was $12.9 million, a decrease of 25 percent from that in the 1997 first quarter.
The  decrease  principally  was a result of the closure of the U.S.  exploration
offices during the 1997 fourth quarter.

         Miscellaneous income and expense, net, decreased by $3.6 million, or 36
percent,  in the 1998 first quarter compared with the corresponding 1997 period.
This change  principally  reflected  currency exchange losses and lower dividend
income from the  Corporation's  13.9 percent minority  interest in Southern Peru
Copper  Corporation,  an effect of the lower average copper prices. The decrease
was partially offset by an increase in interest income from increased short-term
investments.


CHANGES IN FINANCIAL CONDITION

         Capital expenditures and investments during the 1998 first quarter were
$188.2 million for Phelps Dodge Mining Company, including $113.3 million for the
acquisition of the stock of Cobre.  Capital  expenditures  and investments  were
$24.9 million for Phelps Dodge Industries.  Capital expenditures and investments
in the  corresponding  1997 period were $94.5  million for Phelps  Dodge  Mining
Company and $27.4 million for Phelps Dodge Industries.  The Corporation  expects
capital  expenditures and investments for the year 1998 to be approximately $350
million for Phelps  Dodge  Mining  Company and  approximately  $125  million for
Phelps Dodge Industries.

         At March 31, 1998,  the  Corporation's  total debt was $996.1  million,
compared with $1,003.3 million at year-end 1997. The Corporation's ratio of debt
to total  capitalization was 26.5 percent at March 31, 1998,  compared with 27.7
percent at December 31, 1997.

         On March 10, 1998, the Corporation paid a regular quarterly dividend of
50 cents per share on its common  shares for the 1998 first  quarter;  the total
amount paid was $29.6 million. On May 6, 1998, the Board of Directors declared a
1998 second quarter regular  dividend of 50 cents per common share. The dividend
is to be paid on June 10,  1998,  to  shareholders  of  record  at the  close of
business on May 20, 1998.

         This year through May 12, the  Corporation has not purchased any of its
shares under its May 7, 1997, share purchase authorization.  Under that program,
2,394,000 shares remain  authorized for purchase.  There were 58,661,000  common
shares outstanding at March 31, 1998.
<PAGE>
                           Part II. Other Information


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)  The  Corporation  filed a Current  Report on Form 8-K on  February  6,
          1998,  with  respect  to  the  issuance  of a new  Shareholder  Rights
          Agreement to the stockholders of record on February 24, 1998.
<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 13, 1998                          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.