Analysis of Profitability Ratios
Quarterly Data
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Balance Sheet: Assets
- Common-Size Income Statement
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Price to Operating Profit (P/OP) since 2012
- Price to Book Value (P/BV) since 2012
- Aggregate Accruals
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Profitability Ratios (Summary)
Diamondback Energy Inc., profitability ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
- Operating Profit Margin
- The operating profit margin exhibited a general declining trend from the first quarter of 2018 through the end of 2020. Starting at above 53% in early 2018, it steadily decreased, turning negative in early 2020 and reaching a notable low point by the fourth quarter of 2020 with values below -190%. Subsequently, the margin demonstrated a significant recovery beginning in early 2021, shifting back into positive territory and rising to nearly 69% by the third quarter of 2022. This pattern indicates a period of operational difficulties culminating in substantial losses during 2020, followed by a strong rebound in profitability in the later quarters.
- Net Profit Margin
- The net profit margin followed a somewhat similar trajectory to the operating profit margin, though with a slightly different magnitude. Initial levels near 36% in early 2018 decreased gradually through 2019 and then abruptly fell into negative territory by the first quarter of 2020, hitting a nadir around -164% in late 2020. Following this severe downturn, there was a gradual recovery throughout 2021 and into 2022, with the margin improving to about 46% by the third quarter of 2022. This suggests that net profitability was heavily impacted during the 2020 period but recovered notably thereafter.
- Return on Equity (ROE)
- ROE displayed a downward trend from a high above 11% in late 2018 to slightly below zero by the first quarter of 2020. The deepest decline occurred in 2020, with ROE plummeting to approximately -51% by the end of that year. Recovery trends began in 2021 with values turning positive again by mid-year and climbing steadily to reach over 31% by the third quarter of 2022. These movements reflect a pronounced decline in shareholders’ equity profitability during 2020, followed by a period of substantial regain in equity returns.
- Return on Assets (ROA)
- The return on assets showed a high around 6.66% at the end of 2018, but then it decreased steadily through 2019 and into 2020, briefly turning negative in early 2020 and reaching almost -26% in late 2020. Similar to other profitability measures, ROA improved from early 2021 onwards, trending upward to reach over 18% by the third quarter of 2022. This indicates asset utilization efficiency declined substantially during the adverse conditions around 2020, with a strong recovery phase thereafter.
Return on Sales
Return on Investment
Operating Profit Margin
Diamondback Energy Inc., operating profit margin calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Income (loss) from operations | |||||||||||||||||||||||||
| Revenue from contracts with customers | |||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||
| Operating profit margin1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Operating Profit Margin, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | |||||||||||||||||||||||||
| ConocoPhillips | |||||||||||||||||||||||||
| Exxon Mobil Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q3 2022 Calculation
Operating profit margin = 100
× (Income (loss) from operationsQ3 2022
+ Income (loss) from operationsQ2 2022
+ Income (loss) from operationsQ1 2022
+ Income (loss) from operationsQ4 2021)
÷ (Revenue from contracts with customersQ3 2022
+ Revenue from contracts with customersQ2 2022
+ Revenue from contracts with customersQ1 2022
+ Revenue from contracts with customersQ4 2021)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The analysis of financial trends over the indicated periods reveals several notable patterns and fluctuations in the company's operational performance.
- Income (loss) from operations
- The income from operations demonstrated positive values consistently from March 2018 through September 2019, peaking around mid-2019. However, starting in December 2019, there was a significant deterioration, culminating in substantial losses through 2020, with the lowest point occurring in mid-2020. This period reflects considerable operational challenges. From early 2021 onwards, a strong recovery is observed, with the income rebounding into positive territory and progressively increasing through to the third quarter of 2022, surpassing previous highs.
- Revenue from contracts with customers
- Revenue exhibited a generally upward trend from early 2018 through late 2019, with growth particularly notable in the first half of 2019. A sharp decline occurred in early 2020, hitting a trough in the second quarter, which coincides with the company's operational losses. Subsequently, revenue recovery commenced in the second half of 2020, accelerating from 2021 onward, achieving steadily increasing quarterly revenues and reaching record levels by late 2021 and into 2022. This indicates a positive market or operational environment resumption.
- Operating profit margin
- The operating profit margin started robustly in 2018, maintaining levels above 50%, indicative of high operational efficiency or favorable cost structures. Margins gradually declined through 2019 but remained positive. From the fourth quarter of 2019, margins turned negative, becoming severely adverse through 2020, with the lowest margins recorded in the last quarter of 2020, correlating with operational losses and revenue declines. Beginning in 2021, margins improved markedly, returning to positive figures by mid-2021 and progressively strengthening thereafter, reaching above 60% by the third quarter of 2022. This recovery suggests effective cost management, improved operational performance, or changes in pricing strategy.
In summary, the data delineates a cycle of strong performance pre-2020, followed by significant disruption and loss during 2020, then a recovery phase commencing in 2021 with strengthening revenue, income, and margins through mid-2022. The patterns suggest resilience and capability to regain profitability and operational efficiency after a period of pronounced downturn.
Net Profit Margin
Diamondback Energy Inc., net profit margin calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Net income (loss) attributable to Diamondback Energy, Inc. | |||||||||||||||||||||||||
| Revenue from contracts with customers | |||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||
| Net profit margin1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Net Profit Margin, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | |||||||||||||||||||||||||
| ConocoPhillips | |||||||||||||||||||||||||
| Exxon Mobil Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q3 2022 Calculation
Net profit margin = 100
× (Net income (loss) attributable to Diamondback Energy, Inc.Q3 2022
+ Net income (loss) attributable to Diamondback Energy, Inc.Q2 2022
+ Net income (loss) attributable to Diamondback Energy, Inc.Q1 2022
+ Net income (loss) attributable to Diamondback Energy, Inc.Q4 2021)
÷ (Revenue from contracts with customersQ3 2022
+ Revenue from contracts with customersQ2 2022
+ Revenue from contracts with customersQ1 2022
+ Revenue from contracts with customersQ4 2021)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The financial data demonstrates several notable trends in profitability and revenue over the analyzed periods.
- Net Income (Loss) Attributable to Diamondback Energy, Inc.
- The net income figures show significant variability over time. There was a generally strong profitability trend throughout 2018 with values consistently above $150 million, peaking at $349 million in the second quarter of 2019. However, starting in the first quarter of 2020, net income turned negative, reaching a substantial loss of approximately $2.39 billion in the second quarter of 2020. This negative trend persisted through 2020, with losses remaining high but decreasing in magnitude toward the end of that year. From 2021 onward, the company returned to profitability, displaying a recovery trend with net income increasing steadily, surpassing $1 billion by the first quarter of 2022, representing a strong rebound.
- Revenue from Contracts with Customers
- Revenue trends reflect overall growth in the company's sales volume or pricing power over the observed period. Revenue steadily increased from around $467 million in the first quarter of 2018 to a peak of over $2.7 billion in the second quarter of 2022. The revenue dip observed in the early quarters of 2020 coincides with the periods of net losses, indicating an external or industry-wide shock affecting sales. However, the subsequent quarters show recovery and a clear upward trajectory, reaching new highs by mid-2022.
- Net Profit Margin
- The net profit margin displayed considerable fluctuation. Throughout 2018, margins were strong, routinely exceeding 30% and peaking near 40%. In 2019, the margins dropped markedly, particularly into the final quarter, reaching around 6%. The margins turned negative in 2020, with extreme declines reflecting the large losses; the worst margin was approximately negative 164% in the last quarter of 2020. From 2021 onward, profitability margins improved substantially alongside net income. Margins climbed back above 30% and even approached nearly 46% by the third quarter of 2022, signaling enhanced operational efficiency or favorable market conditions.
In summary, the company experienced significant financial distress during 2020, likely due to external adverse conditions, as evidenced by negative net income and profit margins, alongside falling revenue. However, the subsequent period shows a solid recovery phase with revenue and profitability not only rebounding but exceeding prior performance levels. The progression from negative to robust positive earnings and margins indicates resilience and effective management responses to the challenging environment faced.
Return on Equity (ROE)
Diamondback Energy Inc., ROE calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Net income (loss) attributable to Diamondback Energy, Inc. | |||||||||||||||||||||||||
| Total Diamondback Energy, Inc. stockholders’ equity | |||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||
| ROE1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| ROE, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | |||||||||||||||||||||||||
| ConocoPhillips | |||||||||||||||||||||||||
| Exxon Mobil Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q3 2022 Calculation
ROE = 100
× (Net income (loss) attributable to Diamondback Energy, Inc.Q3 2022
+ Net income (loss) attributable to Diamondback Energy, Inc.Q2 2022
+ Net income (loss) attributable to Diamondback Energy, Inc.Q1 2022
+ Net income (loss) attributable to Diamondback Energy, Inc.Q4 2021)
÷ Total Diamondback Energy, Inc. stockholders’ equity
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends regarding profitability, equity, and return on equity (ROE) over the examined periods.
- Net Income (Loss) Attributable to Diamondback Energy, Inc.
- The net income values demonstrate significant volatility throughout the periods. Initially, net income experienced moderate fluctuations, with values ranging from 157 to 349 million USD between early 2018 and mid-2019. However, starting in March 2020, a pronounced decline is evident, with consecutive quarters registering substantial losses, notably reaching a low of -2393 million USD in June 2020. This downturn persisted through 2020, followed by a recovery beginning in early 2021. By the end of 2021 and into 2022, net income showed strong positive growth, peaking at 1416 million USD in June 2022, before slightly decreasing in the subsequent quarter.
- Total Stockholders’ Equity
- Stockholders’ equity followed an overall upward trajectory throughout the observed timeframe. From 5417 million USD in March 2018, equity steadily increased with a notable jump from September to December 2018, reaching 13,699 million USD. Despite some fluctuations and minor declines during late 2019 and 2020, the equity base remained relatively strong. From early 2021 onward, shareholder equity continued to grow steadily, reaching 13,843 million USD by the third quarter of 2022, reflecting ongoing capital accumulation or retained earnings growth despite earlier net losses.
- Return on Equity (ROE)
- ROE exhibited considerable variation in alignment with net income trends. Initially, ROE values hovered between approximately 5% and 11% during 2018, indicating moderate profitability relative to equity. There was a decline toward the end of 2018 and into 2019, with ROE dropping to as low as 1.81%. The most severe impact is observed during 2020, where ROE turned sharply negative, reaching a minimum of -51.36%, reflecting substantial net losses during this period. The recovery phase starting early 2021 saw ROE improving dramatically, turning positive and strengthening significantly to over 30% by the third quarter of 2022, surpassing pre-2020 profitability levels.
In summary, the company's financial performance demonstrated resilience with a strong recovery following a period of significant losses in 2020. The recovery is supported by increasing net income and improving return metrics, alongside a growing equity base. This suggests effective management responses to adverse conditions, enabling a return to profitability and enhancing shareholder value over the latter periods.
Return on Assets (ROA)
Diamondback Energy Inc., ROA calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Net income (loss) attributable to Diamondback Energy, Inc. | |||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||
| ROA1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| ROA, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | |||||||||||||||||||||||||
| ConocoPhillips | |||||||||||||||||||||||||
| Exxon Mobil Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q3 2022 Calculation
ROA = 100
× (Net income (loss) attributable to Diamondback Energy, Inc.Q3 2022
+ Net income (loss) attributable to Diamondback Energy, Inc.Q2 2022
+ Net income (loss) attributable to Diamondback Energy, Inc.Q1 2022
+ Net income (loss) attributable to Diamondback Energy, Inc.Q4 2021)
÷ Total assets
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Income (Loss) Attributable to Diamondback Energy, Inc.
- The net income figures exhibit significant volatility over the observed periods. Starting with moderate positive values in early 2018, there was a substantial increase throughout 2018 and mid-2019, peaking at $368 million in September 2019. However, there was a pronounced downturn beginning in late 2019 and continuing through 2020, with marked losses reaching a nadir of -$2,393 million in the second quarter of 2020. Following this steep decline, the company demonstrated a strong recovery from late 2020 onward, returning to positive net income levels and reaching approximately $1.4 billion by the third quarter of 2022.
- Total Assets
- Total assets showed a general upward trend from 2018 through to 2019, with a sharp increase in the fourth quarter of 2018. Assets peaked around $23.5 billion in late 2019, followed by a decline throughout 2020, bottoming at approximately $17.6 billion in the fourth quarter of 2020. From 2021 forward, total assets steadily increased again, reaching nearly $23.8 billion by the third quarter of 2022, surpassing earlier highs and suggesting ongoing asset growth and reinvestment.
- Return on Assets (ROA)
- ROA initially remained positive in 2018, fluctuating between approximately 3% and 6.7%. The metric declined significantly in late 2019 and through 2020, turning negative and reaching a low point of -25.64% in the fourth quarter of 2020. This indicates substantial operational and asset inefficiencies during this period. Starting in 2021, ROA showed a marked improvement, turning positive again and increasing steadily through 2022, reaching an estimated 18.37% by the third quarter. This recovery signals enhanced profitability relative to asset base and improved operational performance.
- Overall Financial Trends
- The data reveals a cycle of strong earnings growth peaking in 2019, followed by a severe decline in profitability and asset base during 2020, likely associated with challenging market conditions. The subsequent recovery phase from 2021 onward is characterized by increasing net income, asset growth, and an improved return on assets, suggesting a successful operational turnaround and strengthening financial position in recent periods.