ConocoPhillips (NYSE:COP)

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

Net Operating Profit After Taxes (NOPAT)

There was a significant recovery in NOPAT from a negative figure of -2,991 million US dollars in 2020 to a positive 10,273 million in 2021, followed by a further rise to 21,159 million in 2022. However, this was followed by notable declines in the subsequent years, with NOPAT falling to 12,357 million in 2023 and further down to 9,976 million in 2024. This pattern indicates a strong rebound post-2020, succeeded by a gradual decrease in operating profitability after 2022.

Cost of Capital

The cost of capital demonstrated a rising trend from 13.91% in 2020 to a peak of 15.37% in 2022. Thereafter, there was a slight decrease to 15.15% in 2023 and further to 14.73% in 2024. The initial increase suggests a growing cost burden or risk associated with capital, which somewhat moderated in the later years.

Invested Capital

The invested capital increased substantially over the period studied, starting from 50,870 million US dollars in 2020 and reaching 106,371 million by 2024. There was a consistent upward trend with a slight decrease from 76,355 million in 2021 to 75,520 million in 2022, followed by growth in the final two years. The overall increase reflects expanding asset or capital base within the company.

Economic Profit

Economic profit was deeply negative in 2020 at -10,067 million US dollars, improving significantly in 2021 to -954 million and turning positive at 9,554 million in 2022. However, the figure collapsed to a marginal positive 45 million in 2023 and reverted back to a negative -5,689 million in 2024. This trend aligns with the movements in NOPAT but also suggests that the company's returns did not consistently exceed its cost of capital in the latter years, diminishing value creation.

Overall, while profitability and economic profit saw strong improvements through 2021 and 2022, the latter years indicated a weakening in performance relative to invested capital and cost of capital. The substantial growth in invested capital alongside declining economic profit in 2023 and 2024 may indicate challenges in generating adequate returns on the increased capital base, potentially signaling efficiency or market environment concerns.

Net Income (Loss) Attributable to ConocoPhillips

The net income attributable to the company demonstrated significant volatility over the analyzed period. In 2020, the figure was a substantial loss of 2,701 million US dollars, indicating a challenging financial year. However, a dramatic recovery occurred in 2021, with net income rising to 8,079 million US dollars, reflecting a strong turnaround.

The upward trend continued in 2022, with net income reaching a peak of 18,680 million US dollars, more than doubling the previous year's performance. Despite a notable decline in 2023 to 10,957 million US dollars, net income remained robust and significantly positive. In 2024, the figure further declined to 9,245 million US dollars, representing a tapering off of profitability but maintaining a solid profit level relative to earlier years.

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes followed a pattern similar to net income, though with some differences in magnitude. The company recorded a negative NOPAT of 2,991 million US dollars in 2020, aligning with the overall loss experienced that year.

A sharp improvement occurred in 2021, with NOPAT rising to 10,273 million US dollars. This growth trend accelerated in 2022, reaching a peak at 21,159 million US dollars, which was the highest point in the observed period. Subsequently, NOPAT decreased to 12,357 million US dollars in 2023 and then to 9,976 million US dollars in 2024.

Despite these declines in the last two years, NOPAT remained significantly positive, indicating continued operational profitability post-tax, though at a lower level than the peak in 2022.

Overall Trend Summary

The financial results demonstrate a recovery from significant losses in 2020 to strong profitability in subsequent years. Both net income and NOPAT peaked in 2022, followed by decreases in the later years of 2023 and 2024, suggesting a potential moderation in earnings after a period of exceptional growth.

The alignment in trends between net income and NOPAT suggests consistent operational performance after tax impacts are considered. The decline after the peak year may indicate changing market conditions, operational challenges, or strategic shifts impacting profitability, but the company remains financially robust relative to 2020 lows.

Income Tax Provision (Benefit)

The income tax provision exhibited significant volatility over the five-year period. In 2020, the provision was a benefit amounting to -485 million USD, indicating a tax credit or refund. This trend reversed dramatically in 2021 with a substantial increase to 4633 million USD, followed by further escalation in 2022 reaching 9548 million USD. Thereafter, the provision declined notably in 2023 to 5331 million USD and continued to decrease in 2024 to 4427 million USD. This pattern suggests a shift from a net tax benefit to considerable tax expenses, peaking in 2022 before trending downward in subsequent years.

Cash Operating Taxes

Cash operating taxes demonstrated an overall upward trajectory from 2020 through 2022, increasing from 502 million USD in 2020 to 7594 million USD in 2022. However, after this peak, the amount decreased significantly to 4270 million USD in 2023 and saw a slight further reduction to 4150 million USD in 2024. This indicates that while the company’s cash tax payments rose sharply in the initial years, they moderated in the most recent periods.

Comparative Insights

Both the income tax provision and cash operating taxes followed similar trends with increases up to 2022 and subsequent declines. The notable spike in 2022 for both metrics may reflect higher taxable income or changes in tax rates or structures influencing the tax liabilities. The subsequent decline may indicate improved tax planning, tax rate reductions, or decreased taxable income in the latter years.

Total Reported Debt & Leases

The total reported debt and leases exhibit a fluctuating yet overall increasing trend from 2020 through 2024. The debt rose significantly from 16,154 million in 2020 to a peak of 20,601 million in 2021, followed by a decline to 17,188 million in 2022. Subsequently, the debt increased again, reaching 19,634 million in 2023 and further escalating to 25,348 million by the end of 2024. This pattern indicates periods of both deleveraging and increased borrowing or lease obligations, with a notable surge in the final reported year.

Common Stockholders’ Equity

Common stockholders’ equity demonstrates a consistent upward trajectory across all years presented. Starting at 29,849 million in 2020, equity grew substantially each year, reaching 45,406 million in 2021, 48,003 million in 2022, and 49,279 million in 2023. The growth accelerates notably in 2024 with equity rising to 64,796 million. This steady increase reflects a strengthening equity base, likely supported by retained earnings growth and possibly additional equity issuance or valuation gains.

Invested Capital

Invested capital shows an overall growth trend with slight volatility. Beginning at 50,870 million in 2020, it increased sharply to 76,355 million in 2021 but then edged down marginally to 75,520 million in 2022. Afterwards, invested capital resumed growth, climbing to 81,278 million in 2023 and making a more pronounced leap to 106,371 million in 2024. The upward movement in invested capital corresponds with the increases in both equity and debt, indicating expanding asset bases or capital expenditures that may be financed through both debt and equity.

The financial data over the five-year period reveals considerable fluctuations across the key financial indicators analyzed.

Economic Profit

Economic profit experienced a worsening position initially, with a significantly negative value of -10,067 million USD in 2020, which improved markedly to -954 million USD in 2021. The trend reversed sharply in 2022, resulting in a strong positive economic profit of 9,554 million USD, indicating a period of enhanced profitability. Following this peak, 2023 showed a steep decline back to a marginal positive result of 45 million USD, and 2024 returned to a negative economic profit of -5,689 million USD, signaling challenges in value generation during the last reported year.

Invested Capital

Invested capital grew consistently over the entire period, increasing from 50,870 million USD in 2020 to a substantial 106,371 million USD by the end of 2024. This growth reflects ongoing investment or asset accumulation, suggesting expansion or continued capital deployment despite fluctuations in profitability.

Economic Spread Ratio

Reflecting profitability relative to invested capital, the economic spread ratio followed a pattern similar to economic profit. It was deeply negative in 2020 at -19.79%, improving toward near breakeven in 2021 with -1.25%. The ratio became strongly positive in 2022 at 12.65%, indicating efficient use of capital during that year. However, subsequent years saw the ratio fall sharply to nearly zero (0.06%) in 2023 and back into negative territory (-5.35%) in 2024, pointing to a decreased return on investment in the latter periods.

Overall, the data depict a period of recovery and peak performance around 2022, followed by a reversal with declines in profitability metrics through 2023 and 2024 despite the continued growth in invested capital. This suggests that the company faced challenges in converting invested capital into economic profit effectively in the most recent years.

The analysis of the annual financial data reveals several notable trends in economic profit, sales revenues, and economic profit margin over the five-year period.

Economic Profit

There was a significant improvement in economic profit from a negative value of -10,067 million US dollars in 2020 to a markedly positive figure of 9,554 million US dollars in 2022. However, this gain was short-lived as economic profit sharply declined afterward, reaching 45 million in 2023 and then falling back into negative territory at -5,689 million US dollars by the end of 2024. This indicates a volatile return on capital with considerable fluctuations, suggesting challenges in sustaining profitable operations beyond 2022.

Sales and Other Operating Revenues

The company's sales and other operating revenues displayed a generally upward trajectory until 2022, increasing more than fourfold from 18,784 million US dollars in 2020 to a peak of 78,494 million in 2022. Following this peak, revenues decreased significantly to 56,141 million in 2023 and remained relatively stable but lower at 54,745 million in 2024. The drop post-2022 likely reflects market or operational factors that constrained revenue generation.

Economic Profit Margin

Consistent with the economic profit trend, the economic profit margin started far negative at -53.59% in 2020 and improved substantially to a positive 12.17% in 2022. Nevertheless, the margin shrank almost to break-even at 0.08% in 2023 before turning negative again to -10.39% in 2024. This shift highlights the narrowing profitability relative to the company's investment base and reflects the deterioration in economic profit despite high sales figures.

Overall, the data depicts a period of recovery and peak profitability culminating in 2022, followed by a regression in financial performance as both economic profit and margin weakened and revenues declined in the subsequent years. This cyclical pattern points to external or internal factors affecting the company's ability to sustain profitability and revenue growth in the later stages of the period analyzed.