Operating Profit Margin
since 2021
Calculation
Expand Energy Corp., operating profit margin, long-term trends, calculation
| Operating profit margin | = | 100 | × | Income (loss) from operations1 | ÷ | Revenues1 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2024 | -18.85% | = | 100 | × | (803) | ÷ | 4,259) |
| Dec 31, 2023 | 51.96% | = | 100 | × | 3,142) | ÷ | 6,047) |
| Dec 31, 2022 | 26.76% | = | 100 | × | 3,780) | ÷ | 14,123) |
| Dec 31, 2021 | 9.64% | = | 100 | × | 704) | ÷ | 7,301) |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 US$ in millions
The operating profit margin exhibited significant fluctuation between 2021 and 2024. Initially, a substantial increase was observed, followed by a dramatic decline resulting in a negative margin in the most recent year.
- Operating Profit Margin Trend
- In 2021, the operating profit margin stood at 9.64%. This increased considerably to 26.76% in 2022, indicating improved operational efficiency or pricing power. The margin continued to rise sharply in 2023, reaching 51.96%, suggesting a period of exceptionally strong profitability. However, a substantial reversal occurred in 2024, with the operating profit margin plummeting to -18.85%, signifying a loss on core operations.
The movement in operating profit margin closely correlates with changes in income from operations and revenues. While revenues increased significantly from 2021 to 2022, the larger increase in income from operations drove the initial margin expansion. The continued margin improvement in 2023 occurred despite a revenue decrease, suggesting effective cost management or a shift towards higher-margin products/services. The negative margin in 2024 is attributable to a substantial decrease in income from operations, exceeding the decline in revenues.
- Revenue and Operating Income Relationship
- Revenues grew from US$7,301 million in 2021 to US$14,123 million in 2022, then decreased to US$6,047 million in 2023 and further to US$4,259 million in 2024. Income from operations mirrored this volatility, increasing from US$704 million in 2021 to US$3,780 million in 2022, decreasing to US$3,142 million in 2023, and ultimately resulting in a loss of US$803 million in 2024. The disproportionate decline in operating income in 2024 is the primary driver of the negative operating profit margin.
The dramatic shift from substantial profitability to an operating loss in 2024 warrants further investigation. Potential contributing factors could include increased operating expenses, decreased sales volume, unfavorable pricing pressures, or a combination of these elements. The significant changes observed necessitate a detailed review of the underlying cost structure and revenue drivers.