Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Income Statement
- Statement of Comprehensive Income
- Analysis of Geographic Areas
- Enterprise Value (EV)
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Current Ratio since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
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Profitability Ratios (Summary)
AT&T Inc., profitability ratios
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), 10-K (reporting date: 2020-12-31).
- Gross profit margin
- The gross profit margin shows a steady and consistent upward trend over the five-year period. Starting at 53.47% in 2020, it slightly declined to 52.74% in 2021 but then significantly improved to 57.89% in 2022. The margin continued to increase to 59.06% in 2023 and further to 59.77% in 2024. This indicates improving efficiency in managing direct costs associated with production or service delivery.
- Operating profit margin
- The operating profit margin exhibited high volatility during the period. It started very low at 3.73% in 2020, dramatically increased to 13.83% in 2021, then sharply declined into negative territory at -3.80% in 2022. In the following years, the margin rebounded substantially to 19.16% in 2023, before slightly declining to 15.57% in 2024. This fluctuation suggests variability in operating expenses or non-recurring operational factors affecting profitability.
- Net profit margin
- The net profit margin pattern largely mirrors the operating margin trends but with consistently lower values. It commenced negative at -3.01% in 2020, improved markedly to 11.89% in 2021, then dropped back to -7.06% in 2022. The margin recovered to positive figures of 11.76% in 2023 and 8.95% in 2024. This indicates that despite operational challenges in some years, the company was able to generate positive bottom-line results most of the time, although with some instability.
- Return on equity (ROE)
- ROE followed a similarly volatile path. It began with a negative return of -3.20% in 2020, improved to a strong positive 12.07% in 2021, declined sharply to -8.74% in 2022, then surged to 13.94% in 2023 before retreating to 10.49% in 2024. Such swings imply fluctuating profitability relative to shareholders' equity, reflecting the inconsistent net profit margins and possibly changes in equity structure.
- Return on assets (ROA)
- ROA displays less pronounced variation but remains closely aligned with profitability trends. The ratio started negative at -0.98% in 2020, ascended to 3.64% in 2021, dropped to -2.12% in 2022, then improved to 3.54% in 2023 and settled at 2.77% in 2024. This trend indicates moderate efficiency in utilizing assets to generate earnings, with some setbacks in 2022.
Return on Sales
Return on Investment
Gross Profit Margin
AT&T Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Operating revenues | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Gross profit margin = 100 × Gross profit ÷ Operating revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Operating Revenues
- Operating revenues show a declining trend from 2020 to 2024. Starting at 171,760 million USD in 2020, revenues decreased slightly to 168,864 million USD in 2021, followed by a sharp drop to 120,741 million USD in 2022. Afterward, revenues stabilized with minor fluctuations, recording 122,428 million USD in 2023 and 122,336 million USD in 2024.
- Gross Profit
- Gross profit also declined significantly over the period, starting at 91,840 million USD in 2020 and slightly decreasing to 89,057 million USD in 2021. This was followed by a more pronounced reduction to 69,893 million USD in 2022. In 2023 and 2024, gross profit showed a mild recovery, reaching 72,305 million USD and 73,115 million USD, respectively.
- Gross Profit Margin
- Contrary to the absolute values of revenue and gross profit, the gross profit margin exhibited an upward trend. It started at 53.47% in 2020 and slightly dipped to 52.74% in 2021. From 2022 onwards, the margin improved consistently, reaching 57.89% in 2022, 59.06% in 2023, and 59.77% in 2024, suggesting enhanced profitability efficiency relative to revenues.
- Overall Analysis
- The company experienced a notable decrease in total operating revenues and gross profit between 2020 and 2022, followed by stabilization of revenues and slight improvement in gross profit in subsequent years. Although absolute profitability declined, the gross profit margin increased significantly from 2022 onward, indicating an improvement in cost management or pricing strategies. This divergence between declining revenues and rising margins suggests efforts to maintain profitability amid revenue pressures.
Operating Profit Margin
AT&T Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income (loss) | ||||||
| Operating revenues | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Telecommunication Services | ||||||
| Operating Profit Margin, Industry | ||||||
| Communication Services | ||||||
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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Operating profit margin = 100 × Operating income (loss) ÷ Operating revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Operating Income (Loss)
- The operating income exhibits significant volatility over the analyzed periods. In 2020, the figure was positive at 6,405 million US dollars, followed by a substantial increase to 23,347 million in 2021. However, a notable downturn occurred in 2022 with a loss of 4,587 million. Recovery is observed in 2023, with income returning to 23,461 million, before declining slightly to 19,049 million in 2024. This pattern reflects periods of both strong profitability and considerable operational challenges.
- Operating Revenues
- Operating revenues demonstrate a downward trend overall. The revenues decreased from 171,760 million US dollars in 2020 to 168,864 million in 2021. A sharp decline occurred in 2022, dropping to 120,741 million. Post-2022, revenues remained relatively stable, with slight increases in 2023 reaching 122,428 million and a marginal decrease to 122,336 million in 2024. The data suggests a significant contraction in revenue between 2021 and 2022, followed by a stabilization phase.
- Operating Profit Margin
- The operating profit margin follows a pattern similar to operating income, indicating fluctuations in profitability relative to revenue. The margin was modest at 3.73% in 2020, rising sharply to 13.83% in 2021. In 2022, it turned negative to -3.8%, reflecting the operating loss reported that year. The margin then experienced a strong rebound to 19.16% in 2023, before declining moderately to 15.57% in 2024. This trend underscores the company's varying efficiency and profitability across the years.
Net Profit Margin
AT&T Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to AT&T | ||||||
| Operating revenues | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Telecommunication Services | ||||||
| Net Profit Margin, Industry | ||||||
| Communication Services | ||||||
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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net profit margin = 100 × Net income (loss) attributable to AT&T ÷ Operating revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income (Loss) Attributable to AT&T
- The net income figures demonstrate substantial fluctuations over the five-year period. In 2020, the company experienced a significant loss of approximately $5.18 billion. This was followed by a strong recovery in 2021, with a net income of around $20.08 billion. However, 2022 saw another reversal with a loss of approximately $8.52 billion. The years 2023 and 2024 again reflected profitability, with net income of $14.4 billion and $10.95 billion respectively, although the profit in 2024 showed a decline compared to 2023.
- Operating Revenues
- Operating revenues exhibited a declining trend from 2020 through 2022, starting at approximately $171.76 billion in 2020 and decreasing sharply to about $120.74 billion in 2022. From 2022 onward, revenues stabilized, remaining relatively flat around $122 billion in both 2023 and 2024. This suggests a period of contraction followed by stabilization in revenue generation.
- Net Profit Margin
- The net profit margin mirrored the volatility observed in net income, exhibiting a negative margin of -3.01% in 2020, a positive swing to 11.89% in 2021, and again a downturn to -7.06% in 2022. In 2023, the margin rebounded to 11.76%, but declined to 8.95% in 2024. The margins indicate inconsistent profitability, with significant margin contraction during loss years and recovery during profit years, although the margin in 2024 was noticeably lower than the peak margin observed in 2021 and 2023.
- Summary
- Overall, the data reveals a pattern of volatility in profitability, with alternating years of losses and high profits. Operating revenues declined sharply over the first three years, then stabilized, while profitability metrics suggest fluctuations likely driven by factors beyond revenue volume alone. The decline in net income and profit margin in 2024 relative to prior profitable years may warrant further investigation into cost structures or external market factors affecting profitability.
Return on Equity (ROE)
AT&T Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to AT&T | ||||||
| Stockholders’ equity attributable to AT&T | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| ROE, Sector | ||||||
| Telecommunication Services | ||||||
| ROE, Industry | ||||||
| Communication Services | ||||||
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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROE = 100 × Net income (loss) attributable to AT&T ÷ Stockholders’ equity attributable to AT&T
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data reveals significant fluctuations in the net income attributable to the company across the analyzed periods. The net income was negative in 2020 and 2022, with losses amounting to -$5,176 million and -$8,524 million respectively, while showing positive values in 2021, 2023, and 2024, peaking at $20,081 million in 2021. Although positive returns resumed in 2023 and 2024, these figures were lower compared to 2021, indicating a degree of volatility in profitability.
Stockholders’ equity displayed a generally declining trend over the five-year period. Beginning at $161,673 million in 2020, it increased slightly in 2021 to $166,332 million, then sharply declined to $97,500 million in 2022. Following this, it showed modest recovery in 2023 and 2024, with values of $103,297 million and $104,372 million respectively; however, these levels remained significantly below those observed in 2020 and 2021.
The return on equity (ROE) mirrored the volatility observed in net income. Negative ROE was reported in 2020 and 2022, with -3.2% and -8.74% respectively, reflecting the periods of net losses. In contrast, 2021, 2023, and 2024 showed positive ROE figures of 12.07%, 13.94%, and 10.49%, respectively, suggesting periods of improved profitability and efficient equity utilization. Nonetheless, the decline in ROE from 2023 to 2024 indicates a slight reduction in return efficiency.
- Profitability Trends
- Profitability exhibited notable instability, marked by alternating years of profit and loss.
- 2021 was a peak year with the highest net income and ROE, while 2022 corresponded to the most substantial negative results.
- Recovery in profitability occurred after 2022, yet the gains did not return to the 2021 peak.
- Equity Trends
- Stockholders’ equity declined sharply after 2021, suggesting significant value erosion or other structural changes during 2022.
- Minor improvement in equity was seen in the last two years, but total equity remained substantially lower than earlier periods.
- Return on Equity (ROE)
- The ROE aligned closely with net income trends, alternating between negative and positive values.
- Positive ROE values in 2021, 2023, and 2024 reflect recovery, though there was a slight decline from 2023 to 2024.
Overall, the data indicates that the company experienced considerable financial volatility throughout the period, with marked swings in profitability and a significant decrease in stockholders’ equity after 2021, followed by partial stabilization. The return on equity profile underscores the mixed performance dynamics inherent in these years.
Return on Assets (ROA)
AT&T Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to AT&T | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| ROA, Sector | ||||||
| Telecommunication Services | ||||||
| ROA, Industry | ||||||
| Communication Services | ||||||
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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROA = 100 × Net income (loss) attributable to AT&T ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income (Loss) Attributable to AT&T
- The net income exhibits significant volatility over the five-year period. The year 2020 experienced a substantial loss of approximately $5.18 billion, followed by a strong recovery in 2021 with a profit of around $20.08 billion. In 2022, the company returned to a loss position, recording an $8.52 billion deficit. The subsequent two years, 2023 and 2024, again showed profitability, with net income of approximately $14.40 billion and $10.95 billion, respectively. The pattern indicates pronounced fluctuations in profitability, suggesting variability in operational performance or external factors impacting earnings.
- Total Assets
- Total assets decreased notably over the observed period. Beginning at roughly $525.76 billion in 2020, assets increased slightly in 2021 to about $551.62 billion, the highest point in the dataset. However, from 2022 onwards, there is a marked decline, with assets dropping to approximately $402.85 billion in 2022, and continuing to fall marginally through 2023 and 2024 to around $394.80 billion. This downward trend may reflect asset divestitures, impairments, or balance sheet restructuring activities.
- Return on Assets (ROA)
- ROA values correspond with the fluctuations observed in net income. The company posted negative returns in 2020 (-0.98%) and 2022 (-2.12%), consistent with net losses during those years. Positive ROA was achieved in 2021 (3.64%), 2023 (3.54%), and 2024 (2.77%), aligning with profitable years. The overall trend highlights volatility in asset efficiency or profitability, with the highest ROA recorded in 2021 followed by a gradual decline through 2024, indicating a decrease in the effectiveness of asset utilization in producing earnings.