Operating Profit Margin
since 2005
Calculation
National Oilwell Varco Inc., operating profit margin, long-term trends, calculation
| Operating profit margin | = | 100 | × | Operating profit (loss)1 | ÷ | Revenue1 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2015 | -2.64% | = | 100 | × | (390) | ÷ | 14,757) |
| Dec 31, 2014 | 16.85% | = | 100 | × | 3,613) | ÷ | 21,440) |
| Dec 31, 2013 | 14.97% | = | 100 | × | 3,423) | ÷ | 22,869) |
| Dec 31, 2012 | 17.75% | = | 100 | × | 3,557) | ÷ | 20,041) |
| Dec 31, 2011 | 20.04% | = | 100 | × | 2,937) | ÷ | 14,658) |
| Dec 31, 2010 | 20.13% | = | 100 | × | 2,447) | ÷ | 12,156) |
| Dec 31, 2009 | 18.21% | = | 100 | × | 2,315) | ÷ | 12,712) |
| Dec 31, 2008 | 21.72% | = | 100 | × | 2,918) | ÷ | 13,431) |
| Dec 31, 2007 | 20.88% | = | 100 | × | 2,044) | ÷ | 9,789) |
| Dec 31, 2006 | 15.81% | = | 100 | × | 1,111) | ÷ | 7,026) |
| Dec 31, 2005 | 10.27% | = | 100 | × | 477) | ÷ | 4,645) |
Based on: 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$ in millions
The operational performance from 2005 to 2015 is characterized by an initial period of aggressive expansion and margin optimization, followed by a phase of revenue peaking and subsequent sharp contraction. Between 2005 and 2008, a strong positive correlation existed between revenue growth and profitability, as the operating profit margin increased from 10.27% to a peak of 21.72%.
- Expansion and Efficiency Gains (2005–2008)
- Operating profit grew substantially from US$ 477 million to US$ 2,918 million. This period was marked by significant operational leverage, where revenue grew by approximately 188% while operating profit increased by over 511%, driving the operating profit margin to its highest recorded level in 2008.
- Stability and Marginal Volatility (2009–2011)
- Following the 2008 peak, the operating profit margin stabilized, fluctuating within a narrow band between 18.21% and 20.13%. Despite a dip in revenue in 2009 and 2010, the ability to maintain margins near 20% suggests a period of consolidated operational control.
- Revenue Peak and Margin Compression (2012–2014)
- Revenue reached its historical zenith of US$ 22,869 million in 2013. However, this growth did not translate into higher profitability. Instead, a downward trend in efficiency is observed, with the operating profit margin compressing from 17.75% in 2012 to 14.97% in 2013, before a slight recovery to 16.85% in 2014.
- Operational Collapse (2015)
- A severe downturn occurred in 2015, characterized by a sharp decline in revenue to US$ 14,757 million. This contraction led to a complete reversal of profitability, with operating profit falling to a loss of US$ 390 million and the operating profit margin dropping to -2.64%.
Overall, the data indicates that while the entity successfully scaled its operations and improved efficiency through 2008, the subsequent years showed a decoupling of revenue growth and margin expansion, culminating in a significant operational deficit by the end of the period.
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