EQT Corp. (NYSE:EQT)

The financial data reveals several notable trends over the five-year period under review. The net operating profit after taxes (NOPAT) exhibits significant volatility and predominantly negative values from 2018 onwards, indicating challenges in generating operating profitability. Specifically, after a positive figure in 2017, NOPAT sharply declines into large negative values in subsequent years, with the lowest point observed in 2018. This pattern suggests sustained operating losses and potential operational difficulties throughout the period.

The cost of capital demonstrates some fluctuation but remains relatively stable within a moderate range, starting at 12.81% in 2017 and settling near 10.94% by 2021. The decline from 2017 to 2019 indicates a reduced capital cost, which might be due to changes in the market environment or company risk profile, whereas the increase post-2019 suggests a rising cost of financing or perceived risk.

Invested capital shows a decreasing trend from 2017 through 2020, contracting from approximately 26.5 billion US dollars to about 15.6 billion US dollars, before moderately increasing in 2021 to roughly 16.5 billion US dollars. This contraction may reflect asset divestitures, impairments, or reductions in investment activities, with a minor recovery in the final year.

Economic profit remains negative for all years presented and confirms continued value destruction relative to cost of capital. The highest economic loss occurs in 2018, with some improvement in later years, yet the company fails to generate positive economic profit at any point. This persistent negative economic profit corresponds with the negative NOPAT and indicates that returns on invested capital do not exceed the cost of capital, signaling inefficiencies or challenges in generating shareholder value.

Operating Profitability

Consistently negative from 2018 onward, reflecting operational challenges.

Cost of Capital

Moderate variability with a decreasing trend until 2019 followed by an increase, indicating shifting financial environment or risk considerations.

Invested Capital

Marked decrease over four years, potentially signaling downsizing or asset sales, with a slight rebound in the final year.

Economic Profit

Persistently negative, underscoring ongoing value destruction despite fluctuations.

Overall, the data reveals a company struggling with operational losses and economic value deficiency, accompanied by a reduction in invested capital and fluctuating financing costs over the period analyzed.

Net Income (Loss) Attributable to EQT Corporation

Over the five-year period from 2017 to 2021, net income exhibited a significant downward trend. In 2017, net income was positive, amounting to approximately $1.51 billion. However, from 2018 onwards, the company incurred losses each year, with the loss magnitude increasing initially in 2018 (around $2.24 billion), followed by a somewhat reduced loss of roughly $1.22 billion in 2019. The losses remained substantial in 2020 and 2021, with figures close to $967 million and $1.16 billion respectively. This pattern suggests persistent financial challenges beginning in 2018 and continuing through 2021, without a return to profitability within this timeframe.

Net Operating Profit After Taxes (NOPAT)

The NOPAT data reveals a similar trajectory to net income, indicating consistent operating losses from 2018 forward. Starting with a positive NOPAT of about $408 million in 2017, the company faced a steep decline to a negative $2.33 billion in 2018. Subsequent years show ongoing negative NOPAT values, though somewhat less severe than 2018, with losses of approximately $1.34 billion, $908 million, and $1.35 billion in 2019, 2020, and 2021 respectively. The continuous negative NOPAT reflects challenges in the core operations, implying difficulties in generating operating profitability post-2017.

Overall Trend Analysis

The data indicates a critical inflection point between 2017 and 2018, with both net income and operating profit shifting sharply from profitability to significant losses. This negative trend persists without material improvement through to 2021. Despite some fluctuations in the magnitude of losses, the absence of recovery highlights ongoing adverse conditions impacting the company's earnings and operational efficiency over this interval.

The financial data reflects fluctuations and notable trends in the tax-related components over the five-year period ending December 31, 2021.

Income Tax Benefit

This item shows a consistent decrease in the magnitude of the tax benefit from 2017 through 2020, moving from approximately -1,188,416 thousand US dollars in 2017 to -298,858 thousand US dollars in 2020. The decreasing absolute value suggests a diminishing tax benefit over time. However, in 2021, there is a slight reversal with the income tax benefit increasing in magnitude to -434,175 thousand US dollars, indicating a partial rebound in the tax benefits recognized.

Cash Operating Taxes

Cash operating taxes exhibit significant volatility during the period. Notably, there is a sharp increase in the cash operating tax outflow in 2018, with a value of -510,482 thousand US dollars, which markedly exceeds the amounts of the surrounding years. In 2019 and 2020, these operating taxes decreased substantially to -58,336 and -85,720 thousand US dollars respectively. Contrasting with previous years, a positive figure of 64,624 thousand US dollars is observed in 2021, indicating a cash inflow or a tax refund rather than an outflow, which marks a substantial positive shift in this cash flow item.

Overall, the data reveals a general trend of decreasing income tax benefits until 2020 followed by a slight increase in 2021, alongside a volatile pattern in cash operating taxes which includes a significant outflow anomaly in 2018 and a notable positive inflow in 2021. These trends suggest shifts in the tax strategy, tax payments, or recognition of tax benefits, as well as possible changes in underlying tax positions or operational tax circumstances during the analyzed period.

Total reported debt & leases

Over the five-year period, total reported debt and leases exhibited a general downward trend from 6,193,259 thousand USD at the end of 2017 to a low of 4,975,379 thousand USD at the end of 2020. However, this was followed by an increase to 5,537,714 thousand USD at the end of 2021, indicating a partial reversal of the previous declining trend.

Common shareholders’ equity

The common shareholders' equity showed a consistent decline from 13,319,618 thousand USD in 2017 to a low of 9,255,240 thousand USD in 2020. Notably, in 2021 there was a recovery to 10,029,527 thousand USD, suggesting improvement in equity position after several years of decrease.

Invested capital

Invested capital experienced a sharp decline from 26,508,072 thousand USD in 2017 to 15,621,670 thousand USD in 2020. This represents a significant reduction in invested capital over these years. In 2021, there was a modest increase to 16,527,021 thousand USD, signaling a stabilization or slight growth after the downward trajectory.

Economic Profit

The economic profit consistently remains negative throughout the analyzed period, indicating ongoing economic losses. There is significant volatility, with a peak loss of approximately -4.16 billion US dollars in 2018, followed by a reduction in losses in 2019. However, losses subsequently increased again in 2020 and 2021, reaching approximately -3.16 billion US dollars by the end of 2021. This pattern suggests persistent challenges in generating returns above the cost of capital.

Invested Capital

Invested capital shows a notable declining trend from 2017 through 2020. The value decreases substantially from around 26.5 billion US dollars in 2017 to approximately 15.6 billion in 2020, reflecting possible divestitures, asset sales, or asset write-downs. In 2021, there is a slight increase to approximately 16.5 billion US dollars, which may indicate some reinvestment or acquisition activities after several years of contraction.

Economic Spread Ratio

The economic spread ratio remains negative throughout, indicating that the company’s returns on invested capital have consistently been below its cost of capital. The deepest negative spread is observed in 2018 at -22.59%, highlighting a particularly poor return environment that year. Although there is a slight improvement in 2019, the spread deteriorates again in subsequent years, reaching -19.1% by 2021. This negative trend aligns with the persistent negative economic profit and suggests ongoing operational or structural inefficiencies.

Overall Trend and Insights

The data reveals a period of economic underperformance marked by sustained negative economic profit and deteriorating economic spread. The consistent reduction in invested capital until 2020, followed by a marginal increase in 2021, suggests potential attempts to optimize or restructure the capital base. Nevertheless, the negative economic spread implies that these efforts have not yet translated into positive economic returns. The company appears to face ongoing challenges in generating value above its cost of capital, warranting continued focus on improving operational efficiency and capital allocation strategies.

Economic Profit

The economic profit demonstrates a consistently negative trend throughout the observed years, indicating persistent losses. The figure worsens from -2,986,719 thousand US dollars in 2017 to -4,155,969 thousand US dollars in 2018, marking the most significant decline. Subsequently, there is an improvement in 2019, reducing the loss to -2,307,898 thousand US dollars. However, this is followed by a slight worsening again in 2020 (-2,531,778 thousand US dollars) and a decline to -3,156,411 thousand US dollars by the end of 2021. Overall, despite fluctuations, the company fails to achieve positive economic profit at any point during the period.

Sales of Natural Gas, Natural Gas Liquids, and Oil

Sales figures exhibit considerable volatility but show a general upward progression over the five-year horizon. There is a strong surge in sales from 2017 (2,651,318 thousand US dollars) to 2018 (4,695,519 thousand US dollars), followed by a decline in 2019 (3,791,414 thousand US dollars) and a more pronounced dip in 2020 (2,650,299 thousand US dollars). Notably, 2021 marks a significant recovery and peak sales figure (6,804,020 thousand US dollars), indicating a major rebound in revenue generation at the end of the period.

Economic Profit Margin

The economic profit margin remains negative each year, signaling that the company is not generating a profitability surplus relative to its capital costs. The margin improves from a low point of -112.65% in 2017 to -46.39% in 2021, showing a general trend of recovery despite remaining substantially below zero. The margin fluctuates between these periods, with notable improvement in 2019 (-60.87%) followed by deterioration in 2020 (-95.53%), before reaching the best margin at the end of 2021.

Overall Summary

Although sales experienced dynamic changes and concluded with a marked increase in 2021, the economic profit and margin reflect ongoing struggles to convert revenue into positive economic returns. Despite a partial recovery after sharp downturns in both economic profit and margin, the company continuously records losses at a considerable scale. The financial data suggest challenges in cost management or capital efficiency that prevent translating strong revenue performance into economic profitability.