Analysis of Profitability Ratios
Quarterly Data
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Analysis of Solvency Ratios
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Profitability Ratios (Summary)
Apache Corp., profitability ratios (quarterly data)
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
The financial data reveals several significant trends across the analyzed periods. Gross profit margin displays a gradual but consistent decline from 83.02% in early 2012 to 64.81% by mid-2016, indicating a reduction in the company's efficiency in generating profit from revenues before operating expenses.
Operating profit margin exhibits a sharp and continuous downward trajectory. Starting at 44.68% in the first quarter of 2012, it decreases steadily, turning negative in late 2014 and worsening substantially thereafter, reaching negative values exceeding 289% by mid-2016. This steep decline highlights increasing operational challenges and possibly escalating costs or decreasing operational income.
Similarly, net profit margin follows a declining trend, beginning at 24.42% in early 2012 and turning negative by late 2014. The decline accelerates significantly in subsequent periods, with net profitability deteriorating to negative margins surpassing 256% by mid-2016. This pattern points toward substantial losses at the net income level, reflecting difficulties in managing overall expenses, taxes, and other non-operating factors.
Return on equity (ROE) mirrors these adverse trends, decreasing from an initial 14.29% to deeply negative values as low as -900.97% during 2016. The extreme negative ROE suggests a severe erosion of shareholder value and potentially significant losses relative to the equity base, indicating financial distress or negative returns on invested capital.
Return on assets (ROA) also declines, moving from 7.98% down to negative values, with the lowest point near -122.7% in 2016, signifying poor asset utilization and inefficiency in generating earnings from the company's assets.
Collectively, the data indicates a worsening financial health trend over the analyzed timeframe, with margins and returns deteriorating sharply after 2013-2014. The progression from positive to deeply negative operating and net margins, along with negative returns on equity and assets, underscores increasing operational difficulties, possible asset impairments, or unfavorable market conditions impacting profitability and returns. This troubling trend would necessitate a thorough strategic reassessment and operational restructuring to restore financial stability.
Return on Sales
Return on Investment
Gross Profit Margin
Apache Corp., gross profit margin calculation (quarterly data)
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Gross profit margin = 100
× (Gross profitQ2 2016
+ Gross profitQ1 2016
+ Gross profitQ4 2015
+ Gross profitQ3 2015)
÷ (Oil and gas production revenuesQ2 2016
+ Oil and gas production revenuesQ1 2016
+ Oil and gas production revenuesQ4 2015
+ Oil and gas production revenuesQ3 2015)
= 100 × ( + + + )
÷ ( + + + )
=
The financial data reveals several noteworthy trends in the company's performance over the observed periods.
- Gross profit
- The gross profit initially demonstrates a generally stable but slightly fluctuating pattern from the first quarter of 2012 through the fourth quarter of 2013, ranging between approximately 3,000 and 3,700 million US dollars. However, starting in 2014, there is a marked decline in gross profit, reaching a low point in the first quarter of 2016 at 657 million US dollars. This downward trend indicates increased cost pressures or reduced profitability in the core business operations over time.
- Oil and gas production revenues
- The oil and gas production revenues exhibit a similar initial trend to gross profit, with values fluctuating but remaining generally high from early 2012 to the end of 2013, peaking around 4,400 million US dollars per quarter. Beginning in 2014, revenues show a consistent decline, halving by early 2016 compared to the early period. This decrease could reflect lower production volumes, reduced commodity prices, or changes in sales contracts.
- Gross profit margin
- The gross profit margin percentage remains relatively stable and high—ranging from approximately 80% to 83%—during the 2012 to 2014 period. Notably, from the first quarter of 2014 onwards, the margin steadily declines, reaching near 65% by mid-2016. This downward trajectory suggests either rising production costs relative to revenues or margin compression due to lower product prices.
Overall, the data indicates that while the company maintained strong revenue generation and profit margins through 2013, a significant deterioration in both revenue and profitability metrics occurred from 2014 forward. This pattern implies operational or market challenges that reduced both top-line and bottom-line performance, alongside weakening efficiency or cost control as evidenced by declining gross margins.
Operating Profit Margin
Apache Corp., operating profit margin calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Operating income (loss) | ||||||||||||||||||||||||
| Oil and gas production revenues | ||||||||||||||||||||||||
| Profitability Ratio | ||||||||||||||||||||||||
| Operating profit margin1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| Operating Profit Margin, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Operating profit margin = 100
× (Operating income (loss)Q2 2016
+ Operating income (loss)Q1 2016
+ Operating income (loss)Q4 2015
+ Operating income (loss)Q3 2015)
÷ (Oil and gas production revenuesQ2 2016
+ Oil and gas production revenuesQ1 2016
+ Oil and gas production revenuesQ4 2015
+ Oil and gas production revenuesQ3 2015)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals important trends in operating income, oil and gas production revenues, and operating profit margin over the observed period.
- Operating Income (Loss)
- Operating income initially exhibited variability, starting at a high of 1,521 million US dollars at the beginning of the period and sharply declining to 840 million by mid-2012. After a brief recovery phase peaking at 1,683 million at year-end 2012, it fluctuated during 2013 with values gradually decreasing towards the end of that year. From 2014 onward, the trend shifted dramatically downward with operating income turning negative in the third quarter of 2014, and losses deepening severely through 2015 and into mid-2016. The magnitude of operating losses peaked in late 2014 and throughout 2015 with values exceeding negative 8,000 million US dollars, signaling significant operational challenges during this timeframe.
- Oil and Gas Production Revenues
- This revenue stream exhibited a declining trend from early 2012 to mid-2016. It started near 4,457 million US dollars in the first quarter of 2012, with moderate fluctuations but an overall gradual decrease throughout the years. Of note, revenues declined steadily through 2014 and fell sharply by 2015, reaching values close to 1,200 million in early 2016, which reflects a reduction to nearly one-quarter of the initial revenue figure. This consistent decline in revenues likely contributed to the worsening operating income and losses observed.
- Operating Profit Margin
- The operating profit margin, reflecting operational efficiency and profitability, followed a decreasing pattern throughout the period under review. Initially, it started at a robust level of approximately 45% in early 2012 but declined to below 30% by the end of 2013. A critical turning point occurred in 2014 when margins fell into negative territory, indicating operating losses relative to revenues. These negative margins expanded rapidly and reached extreme negative values surpassing -400% by late 2015 and early 2016. This dramatic deterioration in profit margin underscores severe financial strain and possibly impaired operational performance or external factors impacting the company's profitability.
Net Profit Margin
Apache Corp., net profit margin calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Net income (loss) attributable to Apache shareholders | ||||||||||||||||||||||||
| Oil and gas production revenues | ||||||||||||||||||||||||
| Profitability Ratio | ||||||||||||||||||||||||
| Net profit margin1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| Net Profit Margin, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Net profit margin = 100
× (Net income (loss) attributable to Apache shareholdersQ2 2016
+ Net income (loss) attributable to Apache shareholdersQ1 2016
+ Net income (loss) attributable to Apache shareholdersQ4 2015
+ Net income (loss) attributable to Apache shareholdersQ3 2015)
÷ (Oil and gas production revenuesQ2 2016
+ Oil and gas production revenuesQ1 2016
+ Oil and gas production revenuesQ4 2015
+ Oil and gas production revenuesQ3 2015)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The analysis of the financial data over the indicated periods reveals significant changes in profitability and revenue trends.
- Net Income (Loss) Attributable to Shareholders
-
The net income figures demonstrate pronounced volatility over the quarters. Initially, from March 2012 through June 2013, the company showed positive net income, fluctuating between approximately 180 million and over 1 billion US dollars. However, starting from March 2014, the trend shifted dramatically toward substantial losses, with the net income becoming negative and reaching a low point around -7.2 billion US dollars by June 2015. Although losses reduced in magnitude slightly toward mid-2016, the figures remained negative, indicating ongoing financial challenges.
- Oil and Gas Production Revenues
-
Revenues from oil and gas production started at a relatively high level, peaking around 4.4 billion US dollars per quarter in late 2012 and mid-2013. Subsequently, there was a downward trend with revenues declining steadily, falling below 2 billion from early 2015 and bottoming near 1.1 billion US dollars in mid-2016. Minor fluctuations are observable, but the overall trajectory is negative, consistent with the period of net losses.
- Net Profit Margin
-
The net profit margin experienced a marked deterioration over the analyzed period. Early quarters demonstrated margins ranging from approximately 12% to 25%, indicating solid profitability. From around early 2014 onward, margins sharply declined into negative territory, hitting extremely low levels below -350% by mid-2015. Although slightly improving thereafter, margins remained deeply negative through mid-2016. This decline in profitability margin mirrors the transition from positive to negative net income, reflecting significant operational or market pressures impacting financial performance.
In summary, the company experienced a period of strong profitability up to mid-2013, followed by a sustained downward trajectory in both revenues and profitability, transitioning into substantial losses and negative profit margins throughout 2014 to mid-2016. The trends suggest considerable adversities affecting operational results and financial health during the latter periods under review.
Return on Equity (ROE)
Apache Corp., ROE calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Net income (loss) attributable to Apache shareholders | ||||||||||||||||||||||||
| Total Apache shareholders’ equity | ||||||||||||||||||||||||
| Profitability Ratio | ||||||||||||||||||||||||
| ROE1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| ROE, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
ROE = 100
× (Net income (loss) attributable to Apache shareholdersQ2 2016
+ Net income (loss) attributable to Apache shareholdersQ1 2016
+ Net income (loss) attributable to Apache shareholdersQ4 2015
+ Net income (loss) attributable to Apache shareholdersQ3 2015)
÷ Total Apache shareholders’ equity
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals distinct trends in profitability, equity, and return on equity (ROE) over the period examined.
- Net Income (Loss) Attributable to Shareholders
- The net income demonstrates considerable volatility across the quarters. Initial periods show positive net income, with values generally fluctuating below 1,100 million US dollars. However, starting from early 2014, a pronounced negative shift is evident. Substantial losses occurred in multiple quarters, reaching peaks in late 2014 and continuing into 2015 and 2016. This indicates a period of considerable financial distress or adverse operational impacts.
- Total Shareholders’ Equity
- The shareholders’ equity exhibited a declining trend over time. Beginning with equity levels around 29,715 million US dollars in early 2012, there was moderate growth until approximately the end of 2013. Subsequently, a marked reduction occurred, dropping sharply from over 30,000 million US dollars to less than 10,000 million US dollars by early 2016. This decline suggests sustained losses or other factors negatively impacting the company’s net asset base.
- Return on Equity (ROE)
- ROE trends correspond closely with the net income and equity changes, reflecting deteriorating profitability. Early data indicates positive ROE figures peaking above 14%, followed by steady decreases with some minor fluctuations. From 2014 onward, ROE turned negative, progressively worsening to extremely low levels below -200%, with the lowest points near -900%. Such negative returns point to significant inefficiencies and value erosion for shareholders during the latter periods.
Overall, the financial metrics portray a company experiencing considerable financial challenges starting around early 2014, characterized by strong negative earnings, a sharp decline in equity, and severely impacted returns on equity. The data implies operational or market difficulties resulting in decreased shareholder value and profitability.
Return on Assets (ROA)
Apache Corp., ROA calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Net income (loss) attributable to Apache shareholders | ||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||
| Profitability Ratio | ||||||||||||||||||||||||
| ROA1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| ROA, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
ROA = 100
× (Net income (loss) attributable to Apache shareholdersQ2 2016
+ Net income (loss) attributable to Apache shareholdersQ1 2016
+ Net income (loss) attributable to Apache shareholdersQ4 2015
+ Net income (loss) attributable to Apache shareholdersQ3 2015)
÷ Total assets
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The financial data indicates significant fluctuations in net income and returns on assets over the analyzed quarters. Initially, net income attributable to shareholders demonstrated variability but remained positive, with peaks notably observed around mid-2013. Subsequently, net income experienced a pronounced decline beginning in early 2014, transitioning into substantial losses that persisted through 2016, signaling deteriorating profitability.
Total assets showed a general declining trend over the period. From a high exceeding 63 billion US dollars during mid-2013, assets decreased steadily to approximately 24 billion US dollars by mid-2016. This reduction in asset base reflects either asset sales, impairments, or other balance sheet contractions, which could contribute to the observed net income losses.
Return on Assets (ROA) followed a declining trajectory consistent with the negative net income figures. Starting from a healthy return near 8% in early 2012, ROA diminished gradually, turning negative by 2014 and reaching extreme negative values by 2015 and 2016. These negative returns indicate that the company was not generating income efficiently from its asset base during the latter periods, reflecting operational and possibly market challenges.
- Net income (loss) attributable to shareholders
- Positive and volatile in early years, peaking in 2013, then sharply falling into sustained losses from 2014 onwards, reaching magnitudes over -7 billion US dollars.
- Total assets
- Peaked in mid-2013 around 63 billion US dollars, followed by a continuous and marked decline to about 24 billion US dollars by mid-2016, indicating significant downsizing or asset impairments.
- Return on Assets (ROA)
- Started high around 8% in early 2012, decreased steadily to negative values by 2014, and worsened significantly through 2015 and 2016, down to approximately -76% by mid-2016, illustrating impaired asset profitability.