Anadarko Petroleum Corp. (NYSE:APC)

The analysis of the quarterly financial data for the specified periods reveals several noteworthy trends concerning the company's profitability and financial leverage.

Return on Assets (ROA)

ROA values first appear from March 31, 2013, showing positive returns above 4% initially. Over the following quarters, a declining pattern emerges, with ROA fluctuating but generally trending downward. From early 2014 onwards, ROA turns negative and deteriorates further, reaching lows close to -14% by late 2015. Despite some minor improvements in 2016 and 2017, ROA remains negative throughout, indicating consistent challenges in generating returns from the company’s assets during this period.

Financial Leverage

Financial leverage ratios show a gradual increase over the years. Starting at around 2.6 in early 2012, the ratio remains relatively stable until late 2013, after which a steady upward trend is observed. By 2016 and 2017, the leverage ratio rises to about 4.0, suggesting an increased reliance on debt financing or liabilities relative to equity. This growing leverage may indicate a strategic shift or increased financial risk.

Return on Equity (ROE)

ROE data starts from March 2013, initially showing positive returns above 11% early on. However, a rapid and steep decline follows, with ROE becoming negative from 2014 forward. The negative returns worsen significantly, reaching extremely low points (below -50%) during 2015 and 2016. While some moderate improvement is seen toward the end of 2016 and into 2017, ROE remains substantially negative, implying significant losses relative to shareholder equity and potential erosion of shareholder value.

Overall, the data depicts a period of financial distress characterized by sharply declining profitability metrics (ROA and ROE) and increasing financial leverage. The negative returns on assets and equity highlight operational and financial challenges, possibly exacerbated by elevated debt levels as reflected in the increased leverage ratios. The negative trend in profitability combined with rising leverage signals heightened financial risk and diminished performance over the analyzed periods.

Net Profit Margin

The net profit margin shows a fluctuating and generally declining trend from March 2012 through September 2017. Starting at 17.97% in the first available period, the margin decreased to 5.11% and exhibited some recovery to 12.37% and 12.35% in mid and late 2012. From early 2013 onwards, a steady deterioration is observed, moving into negative territory by the second quarter of 2014. The margin reached a low of -70.55% in the fourth quarter of 2015, indicating significant losses that persisted through the subsequent periods. Although there was a slight improvement after the trough, the margin remained negative, ranging between -20% to -48% from 2016 to 2017, showing continued operational challenges with profitability.

Asset Turnover

Asset turnover remained relatively stable but showed a slight declining trend over the period analyzed. It started at approximately 0.25 in early 2012 and increased marginally to about 0.28 by late 2013 and early 2014. After this, a downward movement is noticeable, falling to about 0.17 in late 2016, indicating reduced efficiency in using assets to generate revenue. However, toward the middle and later part of 2017, asset turnover exhibited a recovery trend, gradually rising back to 0.24 by the third quarter of 2017. This suggests some improvement in asset utilization efficiency following a period of decline.

Financial Leverage

Financial leverage demonstrated an increasing trend over the full period. Beginning around 2.69 in the first quarter of 2012, leverage broadly declined slightly until 2013, reaching 2.47, then sharply increased thereafter. It reached levels above 4.0 by the third quarter of 2016 and remained elevated around 3.8 to 4.0 in 2017. This rising leverage indicates a growing reliance on debt financing, potentially increasing financial risk during periods marked by profitability challenges.

Return on Equity (ROE)

Return on equity followed a pattern largely consistent with net profit margin, reflecting overall profitability trends. Initial ROE values around 11.59% at the start of the recorded period declined to as low as -52.20% in the fourth quarter of 2015. ROE remained deeply negative over the subsequent quarters, albeit with some fluctuations, improving modestly to approximately -18.06% by the third quarter of 2017. This negative performance highlights sustained reductions in shareholder value and indicates significant financial stress for the company during the extended period.

The financial data reveals several notable trends in the company's profitability, efficiency, and leverage over the analyzed periods.

Tax Burden

The tax burden ratio is available only starting from the first quarter of 2013. It shows a declining trend, starting at 0.68 in Q1 2013 and decreasing substantially to around 0.36 by Q2 2013. It remains relatively stable near the 0.4 to 0.5 range in the subsequent quarters. This decline indicates the company retained a lower proportion of earnings after tax over time.

Interest Burden

The interest burden remains relatively steady between 0.7 and 0.83 from Q1 2013 to Q4 2013, indicating moderate interest expenses relative to EBIT. However, there is a sharp decrease indicated by negative values in Q1 and Q2 2014, with a value as low as -2.08, which likely reflects unusual or non-recurring items impacting earnings before interest and taxes negatively. The data is not available for later periods.

EBIT Margin

The EBIT margin sees a significant downward trajectory starting in 2013. It begins at 31.96% in Q1 2013 but drops sharply to negative figures from Q2 2014 onward, reaching an extremely low point of -92.18% in Q4 2015. Although there is some minor improvement in subsequent quarters, EBIT margins remain deeply negative through 2016 and 2017, indicating persistent operational losses or high operating costs relative to revenue during these years.

Asset Turnover

The asset turnover ratio is relatively stable throughout the period, fluctuating slightly between 0.17 and 0.28. It shows a minor decline starting around Q4 2014, falling from 0.28 to a low of 0.17 in Q4 2016, followed by a gradual increase back up to approximately 0.24 by Q3 2017. This suggests a decreasing efficiency in generating revenue from assets during the mid-period, recovering somewhat toward the end.

Financial Leverage

Financial leverage increases steadily over the years, starting around 2.69 in Q1 2012 and rising consistently to reach approximately 4.0 by Q3 2017. This upward trend indicates growing reliance on debt financing, which could increase the financial risk profile of the company.

Return on Equity (ROE)

The ROE exhibits a sharp decline over the period. Initial values in early 2013 range from 11.59% to a low of 3.3%, followed by a steep drop into negative territory beginning in Q2 2014. The decline continues dramatically with the worst ROE recorded near -52.2% in Q4 2015. Although some recovery is observable in 2017, the ROE remains substantially negative, indicating that shareholder value was eroding significantly due to persistent losses.

Overall, the company's financial performance shows a deterioration in profitability and operational efficiency beginning in 2014, coinciding with negative EBIT margins and returns on equity. Increasing financial leverage suggests greater utilization of debt, which may compound risk. The stability in asset turnover combined with worsening margins points toward challenges in managing costs or market conditions adversely affecting profitability.

The financial data reveals distinct trends over the analyzed periods for key performance indicators including Net Profit Margin, Asset Turnover, and Return on Assets (ROA).

Net Profit Margin (%)

This metric shows fluctuating profitability with initial positive values in the early periods of 2013, reaching a peak around 17.97% as of March 31, 2012, although data for earlier periods is missing. Thereafter, a general decline is observed, with several periods showing negative margins starting from the first quarter of 2014. The losses deepen progressively through 2015 and 2016, reaching its lowest point at -70.55% by June 30, 2016. Towards the last reported periods in 2017, margins improve slightly but remain significantly negative, around -18.54% by September 30, 2017. This trend indicates a deteriorating profitability situation over the years, with a partial recovery but no return to positive profitability margins by the end of the reported timeline.

Asset Turnover (ratio)

The asset turnover ratio remains relatively stable during the early periods, approximately 0.25 to 0.28 between March 2013 and December 2014, suggesting consistent efficiency in using assets to generate sales. From the beginning of 2015, a gradual but steady decline in asset turnover occurs, reaching a low of 0.17 by December 31, 2016. In 2017, a modest recovery is observed with the ratio increasing to 0.23-0.24 by September 30, 2017. This pattern reflects a diminishing efficiency in asset utilization through 2015 and 2016 followed by slight improvement in operational effectiveness toward 2017.

Return on Assets (ROA) (%)

Return on Assets follows a pattern similar to net profit margin, starting with positive but low returns early in 2013, peaking near 4.55% in March 2012 as per available data. The ROA declines sharply into negative territory starting in early 2014 and continues to worsen through 2015 and 2016, hitting a nadir around -14.42% by June 30, 2016. A slight uplift is noted towards 2017; however, returns remain negative, ending near -4.51% in the last recorded period. This sustained negative ROA implies that the company’s asset base has been generating losses rather than profits across the majority of these periods.

Overall, the data indicates persistent challenges in profitability and asset utilization commencing from 2014 onward. Despite some recovery attempts in asset turnover and profit margin in 2017, the company remained in a financially strained position with ongoing negative returns and margins. This trend suggests the need for a strategic reassessment aiming at improving operational efficiency and reversing losses.

The financial data reveals several notable trends across the examined periods.

Tax Burden

The tax burden ratio is reported beginning from March 31, 2013, fluctuating between 0.36 and 0.68. Early in the period, it reached a peak of 0.68, followed by a noticeable decline to around 0.36 in subsequent quarters, and then stabilized near the mid-0.4 range. This indicates varying tax efficiency or changes in tax-related expenses over time.

Interest Burden

The interest burden ratio is positive and relatively stable early in the data with values mostly between 0.73 and 0.83, suggesting consistent coverage of interest expenses. However, significant volatility appears in later periods with negative values as low as -2.08, indicating either losses before interest or issues related to interest expense management during these quarters.

EBIT Margin (%)

The EBIT margin shows a declining trend over time. Initial figures start positively around 32%, dropping increasingly through the quarters, turning negative starting approximately mid-2014. The margin reaches substantial negative depths of -67% to -92% by the end of 2015 and continues to remain deeply negative thereafter, indicating deterioration in operating profitability.

Asset Turnover

Asset turnover remains fairly stable early on, fluctuating slightly between 0.25 and 0.28, reflecting consistent asset use efficiency. From 2015 onwards, a gradual decline appears, with the ratio dropping to approximately 0.17 during 2016, signaling reduced efficiency in generating sales from assets. A mild recovery ensues towards the end of the period, with figures rising back to 0.23-0.24.

Return on Assets (ROA) (%)

The ROA demonstrates a clear decline across the timeline. Initially posting positive returns near 4.5%, the ratio moves into negative territory starting in early 2014 and worsens over subsequent periods. It hits lows around -14% by late 2015 and remains negative though slightly improving towards the end of the data horizon. This represents a sustained loss in asset profitability over the years reported.

Overall, the data point to challenges in profitability and asset efficiency starting around mid-2014, marked by declining EBIT margins, worsening ROA, volatile interest burden, and decreasing asset turnover. The tax burden exhibits variability but remains less volatile compared to other metrics. The negative trends suggest operational and financial difficulties affecting overall returns and asset utilization during the latter part of the reported periods.

The financial ratios exhibit notable fluctuations over the observed periods, reflecting significant changes in profitability and financial burden.

Tax Burden

The tax burden ratio is reported starting from March 31, 2013, showing considerable variability. It decreases sharply from 0.68 in Q1 2013 to 0.36 in Q2 2013, then rises moderately through the rest of 2013, stabilizing near 0.5. This indicates variability in effective tax rates impacting net income during 2013, though data is missing for subsequent years.

Interest Burden

The interest burden ratio displays a declining trend with values below 1, suggesting interest expenses impacted operating income negatively, particularly pronounced in the last quarters of 2014 where values drop steeply to negative levels (e.g., -2.08 and -0.21). This deterioration implies increased interest expense or losses, adversely affecting earnings before tax during those periods.

EBIT Margin

The EBIT margin shows a strong downward trajectory from early 2013 onwards. Beginning with a high of almost 32% in Q1 2013, the margin declines substantially to negative figures starting in mid-2014, reaching a low of -92% in Q4 2015. This indicates escalating operational losses and severe erosion in earnings before interest and taxes, with marginal recovery but remaining negative through 2017.

Net Profit Margin

The net profit margin follows a pattern similar to the EBIT margin but with amplified severity. Initially positive in early 2013, it deteriorates steadily, with substantial negative margins after Q2 2014, plummeting to -70.55% in Q4 2015. Despite partial improvement by 2017, margins remain deeply negative, signaling persistent net losses over multiple consecutive quarters.

Overall, the data reflects a pronounced decline in profitability beginning around mid-2013 with operational and net profitability severely impacted. Increased interest burden and fluctuating tax burden exacerbate the negative profitability trends. The sustained negative margins in recent periods highlight ongoing financial challenges and the need for strategic mitigation.