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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 September 30, 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 November 10, 1997:  58,771,160 shares.

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<PAGE>
                            PHELPS DODGE CORPORATION

                          Quarterly Report on Form 10-Q

                    For the Quarter Ended September 30, 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)
                                                Third Quarter  First Nine Months
                                                -------------  -----------------

                                                   1997   1996   1997     1996
                                                   ----   ----   ----     ----


Sales and other operating revenues .............. $961.7  853.6 3,048.4 2,816.0
                                                  ------  ----- ------- -------

Operating costs and expenses
  Cost of products sold .........................  664.1  613.4 2,102.9 1,924.8
  Depreciation, depletion and amortization ......   72.9   61.9   211.5   185.8
  Selling and general administrative expense ....   33.3   29.4   102.2    91.1
  Exploration and research expense ..............   20.6   22.2    64.3    62.3
  Provision for asset dispositions and
    other non-recurring charges (see Note 4) ....   20.8    --     20.8     --
                                                  ------  ----- ------- -------
                                                   811.7  726.9 2,501.7 2,264.0
                                                  ------  ----- ------- -------
Operating income ................................  150.0  126.7   546.7   552.0
 Interest expense ...............................  (20.5) (17.5)  (53.3)  (45.0)
 Capitalized interest ...........................    5.0    0.5    11.2     1.0
 Miscellaneous income and expense, net ..........    7.2   11.4    32.1    28.6
                                                  ------  ----- ------- -------
Income before taxes, minority interests and
 equity in net earnings of affiliated companies .  141.7  121.1   536.7   536.6
  Provision for taxes on income .................  (43.9) (39.3) (166.3) (174.4)
  Minority interests in consolidated subsidiaries    1.0   (3.9)   (4.1)  (10.3)
  Equity in net earnings of affiliated companies     5.4    2.3    10.2     7.7
                                                  ------  ----- ------- -------

Net income ...................................... $104.2   80.2   376.5   359.6
                                                  ======  ===== ======= =======

Earnings per share .............................. $ 1.72   1.22    6.02    5.40
                                                  ======  ===== ======= =======


Average number of shares outstanding ............   60.6   65.7    62.5    66.6

See Notes to Consolidated Financial Information.
<PAGE>
                                                Third Quarter  First Nine Months
                                                -------------  -----------------

                                                   1997   1996   1997     1996
                                                   ----   ----   ----     ----
BUSINESS SEGMENTS
(Unaudited; in millions)

Sales and other operating revenues
  Phelps Dodge Mining Company ................... $542.3  437.2 1,736.4 1,551.1
  Phelps Dodge Industries .......................  419.4  416.4 1,312.0 1,264.9
                                                  ------  ----- ------- -------
                                                  $961.7  853.6 3,048.4 2,816.0
                                                  ======  ===== ======= =======

Operating income (loss)
  Phelps Dodge Mining Company ................... $116.3   76.5   430.5   407.4
  Phelps Dodge Industries .......................   44.0   58.8   149.2   173.3
  Corporate and other ...........................  (10.3)  (8.6)  (33.0)  (28.7)
                                                  ------  ----- ------- -------
                                                  $150.0  126.7   546.7   552.0
                                                  ======  ===== ======= =======
See Notes to Consolidated Financial Information.
<PAGE>
CONSOLIDATED BALANCE SHEET
--------------------------
(Unaudited; in millions)

                                                      September 30, December 31,
                                                          1997          1996
                                                      ------------  ------------

Assets
  Cash and cash equivalents ........................   $   252.8         470.1
  Accounts receivable, net .........................       486.4         489.1
  Inventories ......................................       308.4         293.0
  Supplies .........................................       114.5         117.0
  Prepaid expenses .................................        16.3           6.1
  Deferred income taxes ............................        44.0          46.2
                                                       ---------      --------
      Current assets ...............................     1,222.4       1,421.5
  Investments and long-term accounts receivable ....       137.5          86.4
  Property, plant and equipment, net ...............     3,242.6       3,020.5
  Other assets and deferred charges ................       289.5         288.0
                                                       ---------      --------
                                                       $ 4,892.0       4,816.4
                                                       =========      ========
                                                                      
Liabilities                                                              
  Short-term debt (see Note 5) .....................   $   258.7          66.5
  Current portion of long-term debt ................        51.5          38.2
  Accounts payable and accrued expenses ............       523.8         564.9
  Income taxes .....................................        18.6          16.3
                                                       ---------      --------
      Current liabilities ..........................       852.6         685.9
  Long-term debt (see Note 5) ......................       611.3         554.6
  Deferred income taxes ............................       457.0         424.9
  Other liabilities and deferred credits ...........       327.8         309.6
                                                       ---------      --------
                                                         2,248.7       1,975.0
                                                       ---------      --------
Minority interests in consolidated subsidiaries ...         70.2          85.5
                                                       ---------      --------
Common shareholders' equity                                              
  Common shares, 59.4 outstanding (12/31/96 - 64.7).       371.4         404.4
  Retained earnings ................................     2,344.7       2,465.0
  Cumulative translation adjustments ...............      (128.6)        (98.8)
  Other ............................................       (14.4)        (14.7)
                                                       ---------      --------
                                                         2,573.1       2,755.9
                                                       ---------      --------
                                                       $ 4,892.0       4,816.4
                                                       =========      ========
See Notes to Consolidated Financial Information.                       
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
(Unaudited; in millions)
                                                 Nine months ended September 30,
                                                 -------------------------------
                                                          1997         1996
                                                        ---------    --------

Operating activities
  Net income ........................................... $ 376.5        359.6
  Adjustments to reconcile net income to net cash                     
    provided by operating activities:                                 
      Depreciation, depletion and amortization .........   211.5        185.8
      Deferred income taxes ............................    37.6         56.3
      Equity earnings net of dividends received ........    (7.3)        (3.9)
      Changes in current assets and liabilities:                      
        (Increase) decrease in  accounts receivable ....   (18.2)        39.0
        (Increase) decrease in inventories .............   (26.2)        13.8
        (Increase) decrease in supplies ................     1.1          2.1
        (Increase) decrease in prepaid expenses ........   (10.6)        (3.6)
        (Increase) decrease in deferred income taxes         2.2          1.3
        Increase (decrease) in interest payable ........     4.0          4.2
        Increase (decrease) in other accounts payable      (28.9)         2.3
        Increase (decrease) in income taxes ............     3.2          1.6
        Increase (decrease) in other accrued expenses       (2.6)        14.0
      Other adjustments, net ...........................    11.5          4.6
                                                         -------      -------
                                                                      
           Net cash provided by operating activities ...   553.8        677.1
                                                         -------      -------
                                                                      
Investing activities                                                  
  Capital outlays ......................................  (444.3)      (338.8)
  Capitalized interest .................................   (11.2)        (1.0)
  Investment in subsidiaries ...........................   (53.1)       (47.3)
  Proceeds from asset dispositions and other, net ......     6.8          3.6
                                                         -------      -------
                                                                      
           Net cash used in investing activities .......  (501.8)      (383.5)
                                                         -------      -------
                                                                      
Financing activities                                                  
  Increase in debt .....................................   316.0         15.7
  Payment of debt ......................................   (46.3)       (17.6)
  Common dividends .....................................   (93.3)       (96.2)
  Purchase of common shares ............................  (451.0)      (247.0)
  Other, net ...........................................     5.3         10.7
                                                         -------      -------
                                                                      
           Net cash used in financing activities .......  (269.3)      (334.4)
                                                         -------      -------
                                                                      
Decrease in cash and cash equivalents ..................  (217.3)       (40.8)
Cash and cash equivalents at beginning of period .......   470.1        608.5
                                                         -------      -------
                                                                      
Cash and cash equivalents at end of period ............. $ 252.8        567.7
                                                         =======      =======
See Notes to Consolidated Financial Information.
<PAGE>
CONSOLIDATED STATEMENT OF COMMON SHAREHOLDERS' EQUITY
-----------------------------------------------------
(Unaudited; in millions)


                                                       
                            Common Shares              Cumulative              
                           ----------------            Translation   Common
                             Number  At Par  Retained  Adjustments Shareholders'
                           of Shares  Value  Earnings   and Other     Equity
                           --------- ------  --------- ----------- -------------

Balance at December 31, 1996.. 64.7   $404.4  $2,465.0   ($113.5)    $2,755.9
 Stock options exercised......  0.4      2.8      11.0                   13.8 
 Common shares purchased...... (5.7)   (35.9)   (415.1)                (451.0)
 Restricted shares issued, net           0.1       0.6       0.9          1.6
 Net income...................                   376.5                  376.5
 Dividends on common shares...                   (93.3)                 (93.3)
 Translation adjustment.......                             (29.8)       (29.8)
 Other........................                              (0.6)        (0.6)
                               ----   ------  --------   -------     --------
Balance at September 30, 1997. 59.4   $371.4  $2,344.7   ($143.0)    $2,573.1
                               ====   ======  ========   =======     ========

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
         present  a fair  statement  of the  results  for  the  interim  periods
         reported.

2.       The results of operations for the  three-month  and nine-month  periods
         ended September 30, 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.

         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 Corporation's  1997 third quarter earnings included  non-recurring,
         pre-tax charges of $20.8 million ($14.4 million, or 24 cents per common
         share,  after taxes)  primarily due to an early  retirement  program at
         Phelps Dodge Mining Company.

5.       The  Corporation's  short-term  debt  increased  from $66.5  million on
         December 31, 1996, to $258.7  million on September 30, 1997,  primarily
         as a result of  borrowings  under the  Corporation's  newly  instituted
         commercial paper program issued for general  corporate  purposes.  This
         program was established on August 15, 1997,  under a private  placement
         agency agreement between the Corporation and two placement agents.  The
         agreement  permits  the  Corporation  to  issue  up  to $1  billion  of
         short-term  promissory notes  (generally known as commercial  paper) at
         any one  time.  Commercial  paper  may  bear  interest  or be sold at a
         discount,  as  mutually  agreed by the  Corporation  and the  placement
         agents at the time of each issuance. The Corporation's commercial paper
         rating  requires  that  issuances of  commercial  paper be backed by an
         undrawn line of credit; the revolving credit agreement  described below
         provides such support.  There were $174.7  million of borrowings  under
         the commercial paper program at September 30, 1997.

         On  June  25,  1997,  the  revolving  credit   agreement   between  the
         Corporation  and several  lenders was amended and  restated  permitting
         borrowings of up to $1 billion until its scheduled maturity on June 25,
         2002.  The  agreement  allows  for two  one-year  renewals  beyond  the
         scheduled  maturity  date  if the  Corporation  requests  and  receives
         approval from at least two-thirds  of the lenders involved. Interest is
         payable at a fluctuating rate based on the agent bank's prime rate or a
         fixed rate based on the Eurodollar  Interbank Offered Rate (LIBOR),  or
         at fixed  rates  offered  independently  by the  several  lenders,  for
         maturities  of from seven to 360 days.  This  agreement  provides for a
         facility fee of six and one-half basis points (0.065  percent) on total
         commitments.  The  agreement  requires  the  Corporation  to maintain a
         minimum  consolidated  tangible  net worth of $1.1  billion  and limits
         indebtedness to 50 percent of total consolidated capitalization.  There
         were no borrowings under this agreement at September 30, 1997.

         In addition,  the  Corporation's  long-term  debt increased from $554.6
         million on December 31, 1996, to $611.3  million on September 30, 1997.
         During the second quarter of 1997, the  Corporation's  80-percent-owned
         Chilean  subsidiary,  Compania  Contractual  Minera Candelaria  (CCMC),
         borrowed $30 million of 12-year,  dollar-denominated  debt to refinance
         Chilean  peso-denominated  debt that was prepaid in December  1996.  In
         addition,  CCMC borrowed $58 million in the 1997 second quarter and $11
         million  in  the  1997  third  quarter  of  a  $150  million,   12-year
         dollar-denominated  facility  arranged  in order to  partially  finance
         CCMC's $320 million  expansion  project.  Both of these  facilities are
         based on floating rates tied to six-month LIBOR and are non-recourse to
         the  Corporation.  Under the  proportional  consolidation  method,  the
         Corporation  reflects  80  percent of these  amounts  in its  financial
         statements.  During the first quarter of 1997, the  Corporation  caused
         CCMC to limit the effect of CCMC's  floating  rate debt by causing CCMC
         to enter into interest rate swaps with certain  financial  institutions
         to  effectively  convert  all of  CCMC's  floating  rate  debt  to 7.84
         percent,  fixed  rate  debt for the life of the debt.  The  obligations
         under the interest rate swaps are non-recourse to the Corporation.

         On  November 5, 1997,  the  Corporation  issued  $100  million of 6.375
         percent notes  maturing on November 1, 2004,  and $150 million of 7.125
         percent  debentures  maturing on November 1, 2027,  under an  Indenture
         dated as of September 22, 1997,  between the  Corporation and The Chase
         Manhattan  Bank,  as  Trustee.  The  Corporation  will  use most of the
         proceeds from the sale of the offered  securities to repay  outstanding
         commercial  paper,  which was issued  for  general  corporate  purposes
         ($174.7  million  principal  outstanding as of September 30, 1997, at a
         weighted  average rate of  approximately  5.55 percent per annum);  the
         remainder will also be used for general  corporate  purposes  including
         (i)  payment  of  capital   expenditures   of  the   Corporation   (ii)
         acquisitions,  and (iii)  purchasing  common shares of the Corporation.
         Pending such application,  such proceeds will be invested in short-term
         securities.

6.       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
         three-month and nine-month periods ended September 30, 1997.

7.       On September 25, 1997, the Corporation  sold its 72.25 percent interest
         in the McDonald gold project in Montana and other associated properties
         to CR Montana Corporation and Canyon Resources Corporation,  the parent
         of CR Montana. The sale included the immediate payment of $5 million to
         the  Corporation.  Under the sales  agreement,  the  Corporation  would
         receive an  additional  payment of between $95 million and $145 million
         upon  commencement of construction or issuance of permits necessary for
         the project. This final component of the purchase price would be based,
         if necessary, on quarterly production payments. 

                        REVIEW BY INDEPENDENT ACCOUNTANTS
                        ---------------------------------

         The  financial  information  as of  September  30,  1997,  and  for the
three-month and nine-month  periods ended September 30, 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


October 9, 1997

To the Board of Directors and Shareholders
  of Phelps Dodge Corporation

We have  reviewed the  accompanying  consolidated  balance sheet of Phelps Dodge
Corporation  and its  subsidiaries  as of September  30, 1997,  the statement of
consolidated  income for the three-month and nine-month  periods ended September
30, 1997 and 1996, the  consolidated  statement of cash flows for the nine-month
periods ended  September 30, 1997 and 1996,  and the  consolidated  statement of
common  shareholders' equity for the nine-month period ended September 30, 1997.
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 consolidate  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  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
</AUDIT-REPORT>
<PAGE>
Item 2.  Management's Discussion and Analysis
---------------------------------------------

                              RESULTS OF OPERATIONS

         Phelps Dodge  Corporation had consolidated  earnings of $118.6 million,
or $1.96 per common share,  in the third  quarter of 1997 before  non-recurring,
after-tax  charges  of  $14.4  million,  or 24 cents  per  common  share,  which
primarily  reflected an early retirement program at Phelps Dodge Mining Company.
Net  income in the 1996 third  quarter  was $80.2  million,  or $1.22 per common
share.  Earnings  for the nine months  ended  September  30,  1997,  were $390.9
million, or $6.25 per common share, before the non-recurring  charges,  compared
with  net  income  of  $359.6  million,  or  $5.40  per  common  share,  in  the
corresponding  1996 period.  Net income after  non-recurring  charges was $104.2
million,  or $1.72 per  common  share,  in the 1997  third  quarter  and  $376.5
million,  or $6.02 per common  share,  for the nine months ended  September  30,
1997.

         Operating  income in the 1997 third quarter was $170.8  million  before
non-recurring  charges  which were $20.8 million on a pre-tax  basis.  Operating
income in the  corresponding  1996 period was $126.7 million.  The 1997 increase
principally  resulted from higher  average  copper prices and higher  volumes of
copper sold from mine  production.  Operating  income was $567.5 million for the
nine-month  period ended  September  30,  1997,  before  non-recurring,  pre-tax
charges.  Operating  income  in the  corresponding  period  in 1996  was  $552.0
million.  The  increase in 1997 was  attributable  to higher  copper  prices and
volumes  partially  offset by lower sales volumes of specialty  chemicals in the
European market and the effects of economic difficulties in Southeast Asia.

         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  $1.02 in the third quarter and
$1.09 in the first nine months of 1997, compared with an average of 91 cents and
$1.08 in the  corresponding  1996 periods.  From October 1 to November 10, 1997,
the average price was 92 cents, closing at 90 cents on November 10, 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  $961.7  million  in the 1997 third  quarter  and  $3,048.4
million in the first nine  months of 1997,  compared  with  $853.6  million  and
$2,816.0  million  in  the  corresponding  1996  periods.   The  1997  increases
principally  resulted from higher average copper prices,  increased copper sales
volumes, and increased sales of wire and cable products and wheels and rims.
<PAGE>
                     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,  electro-winning,  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, principally
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.

--------------------------------------------------------------------------------

                                            Third Quarter     First Nine Months
                                            -------------     -----------------
                                            1997     1996       1997      1996
                                            ----     ----       ----      ----

Copper production (short tons):
  Total production----------------------  250,200   227,000    726,900   694,400
  Less minority participants' shares *--   43,800    39,100    126,400   121,100
                                         --------  --------   --------  --------

  Net Phelps Dodge share----------------  206,400   187,900    600,500   573,300
                                         ========  ========   ========  ========


Copper sales (short tons):
  Net Phelps Dodge share from
    own mines---------------------------  210,500   194,500    593,000   573,900
  Purchased copper----------------------   63,400    43,900    219,600   163,500
                                         --------  --------   --------  --------

  Total copper sales--------------------  273,900   238,400    812,600   737,400
                                         ========  ========   ========  ========


New York Commodity Exchange
  average spot price per
  pound - copper cathodes--------------- $   1.02      0.91       1.09      1.08

                                                        (in millions)

Sales and other operating revenues------ $  542.3     437.2    1,736.4   1,551.1
  
Operating income------------------------ $  116.3      76.5      430.5     407.4

------------------------------

*        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 of copper increased by 35,500 tons
or 15 percent in the third  quarter of 1997 and by 75,200  tons or 10 percent in
the first nine months of 1997, compared with the corresponding 1996 periods. The
sales  volume  increases  principally  were due to  higher  production  from the
Morenci  mine and  copper  purchased  for  resale.  Resulting  sales  and  other
operating revenues in the third quarter of 1997 were $542.3 million,  24 percent
higher than the  corresponding  1996  period,  while  sales and other  operating
revenues  in the first nine  months of 1997 were  $1,736.4  million,  12 percent
higher than the same 1996 period.

         Phelps Dodge Mining Company reported operating income of $137.1 million
in the third quarter  before $20.8  million of  non-recurring,  pre-tax  charges
which  primarily  reflected  an  early  retirement  program  (see  Note 4 to the
Consolidated Financial Information).  Operating income in the 1996 third quarter
was $76.5 million.  For the nine-month  period ending September 30, 1997, Phelps
Dodge Mining Company  contributed  operating income of $451.3 million before the
effects  of the  non-recurring  charges,  compared  with  $407.4  million in the
corresponding  1996 period.  These  increases  reflected  higher  average copper
prices and higher volumes of copper sold from mine production.

         The Phelps  Dodge  Mining  Company  share of mine  production  from its
worldwide  operations  was a record  206,400  tons of copper  in the 1997  third
quarter  and  600,500  tons in the first nine  months of 1997.  This  production
compares  with  187,900  tons in the 1996 third  quarter and 573,300 tons in the
first nine months of 1996.  Phelps Dodge Mining  Company  copper sales from mine
production  were also a record at  210,500  tons in the 1997 third  quarter  and
593,000  tons in the first nine months,  compared  with 194,500 tons and 573,900
tons in the corresponding 1996 periods.

         At the end of October 1997,  Phelps Dodge Mining Company  completed the
expansion of its Candelaria  operation in northern Chile, more than eight months
ahead of schedule and $30 million,  or 10 percent,  below the budgeted cost. The
expansion  included  additional  mining  activity,  the construction of a second
semi-autogenous grinding mill, and new and expanded concentrator facilities. The
expansion  will  bring   Candelaria's   average  annual  copper   production  to
approximately 380 million pounds,  increasing the Corporation's  share of copper
production at Candelaria by nearly 130 million pounds annually, and boosting the
Corporation's worldwide copper production by 9 percent.

         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 November 10, 1997, employees who were covered by
the agreements have continued to work without a contract.

         In  December  1996,  the United  States  District  Court of the Eastern
District of New York ruled that the 1986 sale of property in Maspeth,  New York,
by the Corporation to the United States Postal Service was to be rescinded.  The
Court ordered the Corporation to return the $14.8 million originally paid by the
Postal  Service for the  property  and to pay  interest on the sales price for a
portion of the time since the sale.  In August 1997,  the  Corporation  returned
$14.8  million to the Postal  Service  for the  Maspeth  property  and paid $6.6
million of interest to the Postal Service.
<PAGE>
                       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.

--------------------------------------------------------------------------------

                                          Third Quarter     First Nine Months
                                          -------------     -----------------
                                           1997   1996       1997       1996
                                           ----   ----       ----       ----
                                       
                                                    (in millions)        
                                       
Sales and other operating revenues:    
   Specialty chemicals---------------   $ 101.5    105.1      316.6      327.4
   Wheels and rims-------------------      78.4     71.3      247.0      235.2
   Wire and cable--------------------     239.5    240.0      748.4      702.3
                                         ------  -------   --------    -------
                                       
                                        $ 419.4    416.4    1,312.0    1,264.9
                                         ======  =======   ========    =======
                                       
                                       
                                       
                                       
Operating income:                      
   Specialty chemicals---------------   $  15.3     19.4       51.1       64.3
   Wheels and rims-------------------      14.1      9.5       33.9       33.7
   Wire and cable--------------------      14.6     29.9       64.2       75.3
                                         ------  -------   --------    -------
                                        $  44.0     58.8      149.2      173.3
                                         ======  =======   ========    =======
                                       
--------------------------------------------------------------------------------

         During  the  1997  third  quarter,  Phelps  Dodge  Industries  recorded
operating  income  of  $44.0  million,   compared  with  $58.8  million  in  the
corresponding 1996 period. Operating income in the first nine months of 1997 was
$149.2  million,  compared with $173.3 million in the first nine months of 1996.
Third  quarter  earnings were  adversely  affected by economic  difficulties  in
Southeast Asia, and by lower sales volumes of specialty  chemicals and generally
weaker currencies in the European market, partially offset by continued strength
in the U.S.  wheel and rim market.  In addition,  the  year-to-date  decrease in
earnings   reflected  the  effects  of  a  first  quarter  1997  strike  at  the
Corporation's London, Ontario, wheel and rim plant.

         On October 6, 1997, the Corporation announced it was having discussions
with selected  potential  buyers for Accuride  Corporation,  its subsidiary that
produces  wheels  and  rims for  heavy  trucks,  trailers,  and  buses,  and for
commercial light trucks and sport utility vehicles.  The sale of this subsidiary
would allow Phelps Dodge to concentrate on its  significant  global growth plans
in mining, wire and cable, and specialty chemicals.

         Accuride,  which is a business  unit of Phelps  Dodge  Industries,  has
steel wheel  operations in Henderson,  Kentucky,  and London,  Ontario,  Canada.
Accuride also is involved in the  production of aluminum  wheels through a joint
venture  arrangement in Erie,  Pennsylvania,  and in a commercial tire and wheel
assembly  joint  venture  in  Springfield,  Ohio.  Accuride  had sales of $307.8
million and operating income of $41.4 million in 1996.

         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 November 10, 1997, employees who were covered
by the agreement have continued to work without a contract.

                            OTHER MATTERS RELATING TO
                      THE STATEMENT OF CONSOLIDATED INCOME

         Miscellaneous  income and  expense,  net was $7.2  million in the third
quarter of 1997, compared with  $11.4  million  in the  third  quarter of  1996.
Miscellaneous income and expense, net was $32.1 million in the first nine months
of 1997, compared with $28.6 million in the corresponding 1996 period. The third
quarter  decrease from prior year  principally  reflected a decrease in interest
income. The year-to-date  increase  principally  reflected a 1996 second quarter
$7.1 million  foreign  exchange  loss from the effect on working  capital of the
devaluation of the Venezuelan bolivar, and a $6.0 million pre-tax, non-cash gain
in the  1997  second  quarter  from  the  exchange  of  shares  of a cost  basis
investment  in a wire and cable  business  located in Greece.  The  year-to-date
increase was partially offset by an $8.3 million decrease in interest income and
a $2.3  million  decrease in  dividends  received  from the  Corporation's  13.9
percent  minority  interest in the Southern  Peru Copper  Corporation.  The $7.1
million 1996 second quarter  foreign  exchange loss from the  devaluation of the
bolivar was offset by an $8.0 million  interest  expense gain that represented a
remeasurement of Venezuelan local currency debt after the devaluation.

                         CHANGES IN FINANCIAL CONDITION

         Capital  expenditures  and investments  during the first nine months of
1997 were $329.8  million for Phelps  Dodge  Mining  Company,  including  $135.2
million for the expansion of the  Corporation's  Candelaria mining operations in
Chile. Capital expenditures and investments were $149.1 million for Phelps Dodge
Industries.  Capital  expenditures  and  investments in the  corresponding  1996
period were $225.4  million for Phelps Dodge Mining  Company and $122.7  million
for Phelps Dodge Industries.  The Corporation  expects capital  expenditures and
investments for the year 1997 to be approximately  $465 million for Phelps Dodge
Mining  Company  (including   approximately  $165  million  for  the  Candelaria
expansion  project).  Phelps Dodge Industries is expected to spend approximately
$245 million during the year.

         At September 30, 1997, the Corporation's total debt was $921.5 million,
compared with $659.3  million at year-end  1996.  Debt  increased as a result of
non-recourse  borrowings for the expansion of the Candelaria mine and borrowings
under the Corporation's newly instituted commercial paper program to support the
Corporation's capital expenditure and share purchase programs. The Corporation's
ratio of debt to total  capitalization  was 25.9 percent at September  30, 1997,
compared  with 18.8  percent at  December  31,  1996.  For  further  information
concerning the Candelaria borrowings, the Corporation's commercial paper program
and the Corporation's  revolving credit agreement that was amended in the second
quarter  of  1997,  please  refer  to  Note  5  to  the  Consolidated  Financial
Information.  Also refer to Note 5 for information  concerning the Corporation's
issuance of $250 million of long-term  notes and  debentures  in November  1997,
which will be used for general corporate purposes including the repayment of the
Corporation's  outstanding  commercial  paper  ($174.7  million at September 30,
1997)  which was  issued for the  Corporation's  capital  expenditure  and share
purchase programs, as well as acquisitions.

         On  September  10,  1997,  the  Corporation  paid a  regular  quarterly
dividend of 50 cents per share on its common shares for the 1997 third  quarter;
the total amount paid was $30.1  million,  bringing  total 1997  dividends  paid
through  September  30 to $93.3  million.  On  November  5,  1997,  the Board of
Directors declared a 1997 fourth quarter regular dividend of 50 cents per common
share to be paid on December 10, 1997, to shareholders of record at the close of
business on November 21, 1997.

         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,   approximately  10  percent  of  its  then  outstanding   shares.  This
authorization  followed a 5 million share purchase program that was initiated in
March 1995 and extended to 10 million shares in March 1996.  Under that program,
9.9 million shares were purchased by the  Corporation.  In 1997 through November
10, the  Corporation  purchased a total of 6.4 million of its common shares at a
total cost of $501.1  million,  including 3.5 million shares at a cost of $282.5
million under the new 6 million share  authorization.  An additional 2.5 million
shares remain  authorized  for purchase  under the new program.  There were 59.4
million common shares outstanding on September 30, 1997.
<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),
and to Paragraph I of Item 1. Legal Proceedings of the Corporation's  Forms 10-Q
for the quarters ended March 31 and June 30, 1997.

         The Corporation  understands that,  pursuant to the applicable  federal
legislation  (Pub.  L. No.  105-18,  ss.  5003,  111  Stat.  158,  181-187,  the
"Legislation"),  the San Carlos Apache  Tribal Court  dismissed the action filed
against the  Corporation in that court on May 12, 1997, by the San Carlos Apache
Tribe. (The Legislation required that suit be dismissed by August 22, 1997.) Any
claims by the San Carlos Apache Tribe relating to the  Corporation's  historical
use and  occupancy  and  operation  of its pump  station on the Black  River and
related  facilities  are now to be  brought,  if at all,  in the  United  States
District Court.


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)      Reports on Form 8-K:

                  The Corporation filed a Current Report on Form 8-K on November
                  3, 1997,  with  respect  to the  issuance  of debt  securities
                  pursuant to an  Indenture,  dated as of  September  22,  1997,
                  between  the  Corporation  and The Chase  Manhattan  Bank,  as
                  Trustee.
<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:  November 13, 1997                     By:    Gregory W. Stevens
                                                    ------------------
                                                    Gregory W. Stevens
                                                Vice President and Controller
                                                (Principal Accounting Officer)
<PAGE>
                    PHELPS DODGE CORPORATION AND SUBSIDIARIES

                                Index to Exhibits
                                -----------------



4.3      Form  of  Indenture,  dated  as of  September  22,  1997,  between  the
         Corporation  and The Chase Manhattan Bank, as Trustee (incorporated  by
         reference   to   the   Corporation's    Registration    Statement   and
         Post-Effective Amendment No. 1 on Form S-3 (Registration Nos. 333-36415
         and  33-44380)  filed with the  Securities  and Exchange  Commission on
         September 25, 1997 (SEC File No. 1-82)).


4.4      Form of 6.375 percent Note, due  November 1, 2004,  of the  Corporation
         issued on November  5, 1997,  pursuant  to the  Indenture,  dated as of
         September 22, 1997,  between the  Corporation  and The Chase  Manhattan
         Bank,  as  Trustee  (incorporated  by  reference  to the  Corporation's
         Current  Report  on Form 8-K filed  with the  Securities  and  Exchange
         Commission on November 3, 1997 (SEC File No. 1-82)).


4.5      Form  of  7.125  percent  Debenture,  due  November  1,  2027,  of  the
         Corporation  issued on  November 5, 1997,  pursuant  to the  Indenture,
         dated as of September 22, 1997,  between the  Corporation and The Chase
         Manhattan   Bank,  as  Trustee   (incorporated   by  reference  to  the
         Corporation's  Current Report on Form 8-K filed with the Securities and
         Exchange Commission on November 3, 1997 (SEC File No. 1-82)).


12       Computation of ratios of total debt to total capitalization.


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