Price to Operating Profit (P/OP)
since 2005
Calculation
Halliburton Co., P/OP, long-term trends, calculation
| P/OP | = | Share price1, 2, 3 | ÷ | Operating profit per share1 | Operating profit per share1 | = | Operating income (loss)1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 13, 2019 | 11.11 | = | 31.40 | ÷ | 2.83 | 2.83 | = | 2,467 | ÷ | 872,542,842 | |
| Feb 9, 2018 | 30.00 | = | 46.70 | ÷ | 1.56 | 1.56 | = | 1,362 | ÷ | 874,909,834 | |
| Feb 7, 2017 | — | = | 54.88 | ÷ | -7.82 | -7.82 | = | -6,778 | ÷ | 866,933,212 | |
| Feb 5, 2016 | — | = | 31.35 | ÷ | -0.19 | -0.19 | = | -165 | ÷ | 858,342,017 | |
| Feb 24, 2015 | 7.19 | = | 43.12 | ÷ | 6.00 | 6.00 | = | 5,097 | ÷ | 849,671,830 | |
| Feb 7, 2014 | 14.09 | = | 51.97 | ÷ | 3.69 | 3.69 | = | 3,138 | ÷ | 850,866,860 | |
| Feb 11, 2013 | 9.16 | = | 40.87 | ÷ | 4.46 | 4.46 | = | 4,159 | ÷ | 931,813,112 | |
| Feb 16, 2012 | 6.94 | = | 35.64 | ÷ | 5.13 | 5.13 | = | 4,737 | ÷ | 922,983,220 | |
| Feb 17, 2011 | 14.70 | = | 48.43 | ÷ | 3.29 | 3.29 | = | 3,009 | ÷ | 913,356,387 | |
| Feb 17, 2010 | 14.11 | = | 31.08 | ÷ | 2.20 | 2.20 | = | 1,994 | ÷ | 905,090,232 | |
| Feb 18, 2009 | 3.81 | = | 17.01 | ÷ | 4.47 | 4.47 | = | 4,010 | ÷ | 897,174,201 | |
| Feb 22, 2008 | 9.10 | = | 36.16 | ÷ | 3.97 | 3.97 | = | 3,498 | ÷ | 880,157,300 | |
| Feb 28, 2007 | 8.87 | = | 30.92 | ÷ | 3.49 | 3.49 | = | 3,484 | ÷ | 999,172,145 | |
| Mar 13, 2006 | 13.31 | = | 34.32 | ÷ | 2.58 | 2.58 | = | 2,662 | ÷ | 1,032,481,302 |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Halliburton Co. Annual Report.
The Price to Operating Profit (P/OP) ratio exhibits significant volatility between 2006 and 2019, reflecting cyclical fluctuations in both market valuation and operational performance. The data indicates a pattern where the P/OP ratio reacts sharply to divergences between share price movements and operating profit per share, highlighting periods of market misalignment and operational instability.
- Valuation Compression and Divergence
- A notable contraction in the P/OP ratio occurred in February 2009, reaching a low of 3.81. This decline was driven by a substantial drop in share price to $17.01, occurring simultaneously with a period-high operating profit per share of $4.47. This suggests a period where market sentiment was heavily discounted despite strong operational results.
- Operational Instability and Ratio Absence
- Between February 2016 and February 2017, a severe operational downturn is observed, with operating profit per share falling into negative territory, reaching -$7.82 in 2017. Due to these losses, P/OP ratios for these years are nonexistent, as the ratio cannot be meaningfully calculated when operating profits are negative.
- Recovery and Valuation Normalization
- The return to profitability in February 2018 triggered a sharp spike in the P/OP ratio to 30.00, the highest recorded value in the sequence. This peak was the result of a recovering share price of $46.70 relative to a modest operating profit per share of $1.56. By February 2019, the ratio normalized to 11.11 as operating profit per share increased to $2.83, aligning the valuation more closely with historical norms.
- Long-term Ratio Trends
- Excluding the period of negative earnings and the 2018 spike, the P/OP ratio generally oscillated between 7 and 15. The fluctuations demonstrate that the market frequently repriced the company's operating earnings, with valuations expanding during recovery phases and contracting during periods of operational strength or systemic market stress.
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