EQT Corp. (NYSE:EQT)

The financial data reveals significant fluctuations in key performance metrics over the five-year period, indicating periods of operational challenges and efforts towards capital management.

Net Operating Profit After Taxes (NOPAT)

There is a marked decline in NOPAT from a positive $408,113 thousand in 2017 to persistent negative values in subsequent years. The largest loss occurs in 2018 at approximately -$2,332,609 thousand. Although losses decrease somewhat in 2019 and 2020, reaching -$1,339,125 thousand and -$908,089 thousand respectively, the figure worsens again in 2021 to -$1,348,798 thousand. This pattern suggests ongoing profitability challenges and possibly increased costs or reduced revenues during this period.

Invested Capital

Invested capital shows a consistent downward trend from $26,508,072 thousand in 2017 to $15,621,670 thousand in 2020. In 2021, however, there is a modest increase to $16,527,021 thousand. This overall reduction in invested capital could reflect asset divestitures, strategic capital allocation adjustments, or attempts to improve capital efficiency in response to operational performance issues.

Return on Invested Capital (ROIC)

ROIC mirrors the trend in NOPAT, declining from a modest positive 1.54% in 2017 to substantially negative figures in the following years: -12.68% in 2018, improving slightly to -8.04% in 2019, and showing a gradual improvement to -5.81% in 2020 before declining again to -8.16% in 2021. These negative returns indicate the company struggled to generate adequate returns on its capital base throughout the period, with some recovery attempts that ultimately did not sustain positive results.

Overall, the data portrays a company facing significant profitability pressures accompanied by strategic capital reductions, yet continuing to deliver negative returns on invested capital. This pattern suggests a need for further strategic evaluation to enhance operating efficiency and capital utilization.

Operating Profit Margin (OPM)

The operating profit margin shows a significant decline from 14.17% in 2017 to negative values in subsequent years. In 2018, it dropped sharply to -60.55%, followed by somewhat smaller negative margins of -36.86% in 2019 and -37.5% in 2020. By 2021, there was an improvement, with the margin rising to -18.87%, though it remained in negative territory. This trend indicates persistent operational challenges over the five-year period, despite some recovery in the final year.

Turnover of Capital (TO)

The turnover of capital ratio experienced a rising trend in certain years. Starting from a low base of 0.1 in 2017, the ratio more than doubled to 0.26 in 2018. It then slightly decreased to 0.23 in 2019 and further dipped to 0.17 in 2020, before increasing markedly to 0.41 in 2021. The overall movement suggests fluctuating efficiency in utilizing capital, with a notable improvement in asset turnover or sales generation relative to capital invested in 2021.

1 – Effective Cash Tax Rate (CTR)

This metric remained consistently at 100% from 2018 to 2021, after an initial value of 108.6% in 2017. The stable rate at 100% during most of the period suggests a consistent level of effective cash tax burden relative to earnings or taxable income, implying no reduction in cash taxes was achieved over these years.

Return on Invested Capital (ROIC)

The return on invested capital demonstrated a negative trend. Starting from a small positive return of 1.54% in 2017, it declined sharply to -12.68% in 2018. Thereafter, it showed partial improvements but remained negative through 2019 to 2021 (-8.04%, -5.81%, and -8.16%, respectively). These data reveal ongoing struggles in generating returns above the cost of capital, indicating suboptimal investment efficiency over the period.

The analysis of the financial data over the five-year period reveals several key trends in the company’s operations and profitability.

Net Operating Profit Before Taxes (NOPBT)

The net operating profit before taxes exhibited significant volatility and overall negative performance after 2017. Starting at a positive value of approximately 375.8 million US dollars in 2017, it sharply declined to a negative 2.84 billion in 2018. Although there were some improvements in subsequent years, the NOPBT remained negative, with values of approximately -1.40 billion in 2019, -994 million in 2020, and -1.28 billion in 2021. This indicates persistent operating losses over the last four years in the consideration period, with the worst performance occurring in 2018.

Sales of Natural Gas, Natural Gas Liquids, and Oil

Sales revenue experienced considerable fluctuation during the period. Initially, sales increased significantly from roughly 2.65 billion US dollars in 2017 to 4.70 billion in 2018. This was followed by a decline to 3.79 billion in 2019 and a further contraction to 2.65 billion in 2020. Sales then rebounded strongly in 2021, reaching a new high of approximately 6.80 billion US dollars. The rebound in 2021 suggests a recovery in sales volumes, prices, or both, reflecting a possible improvement in market conditions or operational adjustments.

Operating Profit Margin (OPM)

The operating profit margin demonstrated a declining and mostly negative trend throughout the period, reflecting deteriorating operating efficiency or profitability. In 2017, the margin was positive at 14.17%, indicating profitable operations. However, it plunged dramatically to -60.55% in 2018, which is consistent with the large operating losses recorded that year. The negative trend continued in subsequent years with margins of -36.86% in 2019, -37.50% in 2020, and an improvement to -18.87% in 2021, although still in negative territory. This partial recovery in 2021 corresponds with the increased sales but does not indicate a return to profitability.

Overall, the financial data suggests the company faced significant operational challenges starting in 2018, resulting in sustained operating losses and negative profit margins despite fluctuating and eventually growing sales. The improvement in sales and operating margin in 2021 points to some recovery but not a full return to profitable operations within the observed timeframe.

Sales of natural gas, natural gas liquids and oil

The sales figures exhibit significant fluctuation over the five-year period. Starting at approximately 2.65 billion USD in 2017, sales more than doubled to about 4.70 billion USD in 2018. This was followed by a decline to around 3.79 billion USD in 2019 and a further decrease to approximately 2.65 billion USD in 2020. A sharp rebound is observed in 2021, with sales increasing substantially to roughly 6.80 billion USD, the highest in the period analyzed.

Invested capital

Invested capital shows a downward trend from 2017 to 2020, decreasing from about 26.5 billion USD to 15.6 billion USD. In 2021, there is a modest increase to approximately 16.5 billion USD. Overall, the invested capital reduced by roughly 38% over the five-year span, reflecting a consistent decrease until a slight recovery in the last year.

Turnover of capital (TO)

Turnover of capital demonstrates volatility corresponding to the changes in sales and invested capital. It rose from 0.10 in 2017 to 0.26 in 2018, aligning with increased sales. It then declined to 0.23 in 2019 and further to 0.17 in 2020, mirroring the downward trends in sales and invested capital. The ratio rose significantly to 0.41 in 2021, the highest level recorded, suggesting improved efficiency in generating sales relative to the invested capital during that year.

Cash operating taxes

Cash operating taxes exhibited significant volatility over the observed periods. Initially, there was a large outflow of 32,320 thousand US dollars in 2017, which sharply increased to a substantial outflow of 510,482 thousand US dollars in 2018. Subsequently, the outflow decreased markedly to 58,336 thousand US dollars in 2019 and further to 85,720 thousand US dollars in 2020. Notably, in 2021, a reversal occurred with cash operating taxes turning positive to 64,624 thousand US dollars, indicating a cash inflow rather than an outflow in this category.

Net operating profit before taxes (NOPBT)

The net operating profit before taxes showed a downward trajectory overall, starting with a positive value of 375,793 thousand US dollars in 2017. From 2018 onwards, the company experienced net operating losses before taxes, with sharp negative values: -2,843,091 thousand US dollars in 2018, -1,397,460 thousand US dollars in 2019, -993,809 thousand US dollars in 2020, and -1,284,174 thousand US dollars in 2021. This trend indicates sustained operational challenges and a considerable decline in profitability over multiple years.

Effective cash tax rate (CTR)

The effective cash tax rate was only reported for 2017, where it was -8.6%, implying a negative tax rate possibly due to tax credits or deferred tax assets. Thereafter, no data were provided, precluding analysis of trends or changes in tax rates in subsequent years.