Occidental Petroleum Corp. (NYSE:OXY)

The data reveals significant variations in the financial performance and structure over the examined periods. The analysis focuses on three key metrics: Return on Assets (ROA), Financial Leverage, and Return on Equity (ROE).

Return on Assets (ROA)

The ROA was not reported in the earliest quarters but showed negative values starting from December 31, 2020, at -18.52%, improving steadily through mid-2021 to nearly zero by December 31, 2021 (-0.43%). A positive trend continued into 2022, peaking at 18.32% by March 31, 2023. Following this peak, there was a gradual decline, with ROA decreasing to around 2.84% by June 30, 2025. This pattern indicates a recovery phase after initial losses, followed by stabilization and a moderate decline in asset profitability in more recent quarters.

Financial Leverage

Financial leverage started at relatively high levels, with a ratio of 3.25 in March 31, 2020, increasing to a peak of 4.38 in June 30, 2021. From this peak, leverage showed a consistent downward trend, falling below 3.0 by March 31, 2022 and further stabilizing between 2.36 and 2.5 through mid-2025. This implies a reduction in the company’s reliance on debt over time, contributing to a less risky capital structure.

Return on Equity (ROE)

The ROE followed a trajectory similar to ROA, initially weakening significantly with large negative values in late 2020 (up to -79.85%) before improving sharply in 2021. By December 31, 2021, ROE turned positive and surged, reaching a peak of 44.97% in December 31, 2022. Similar to ROA, after this peak, ROE gradually declined, stabilizing around 6.72% by June 30, 2025. This reflects a recovery in shareholder returns following substantial losses and a subsequent moderation in profitability.

Overall, the observed trends suggest an initial period of financial stress or significant losses, followed by recovery in profitability and a decrease in financial leverage. The company appears to have strengthened its financial position and profitability metrics after 2020, although the pace of improvement has moderated in recent years.

The financial metrics indicate significant fluctuations and subsequent stabilization over the observed periods. The net profit margin, initially showing sizable negative values during 2020, experienced a marked turnaround by early 2021 with a progressive increase that peaked near the end of 2022. Post-peak, a gradual decline is observed into 2025, although values remain positive, suggesting sustained profitability albeit at diminishing rates.

Asset turnover ratios began low and displayed consistent growth through to the end of 2022, indicating improved asset utilization and operational efficiency. However, from 2023 onwards, a gentle downward trend is evident, pointing to a slight reduction in the efficiency with which the company is generating revenue from its assets.

Financial leverage demonstrated a rising trend from early 2020 into mid-2020, reaching its highest point in late 2020, followed by a steady reduction into 2022. After this decline, leverage stabilized around a ratio slightly above two, with minor fluctuations through to mid-2025. This pattern suggests a strategic deleveraging phase followed by maintenance of a moderate leverage level.

Return on equity mirrors the net profit margin behavior closely, with deep negative returns in 2020 transitioning to substantial positive returns by late 2021 and peaking in late 2022. Following this peak, ROE shows a reducing trend through 2025, aligning with the observed profit margin decline, but remains positive, reflecting preserved shareholder value creation despite the tapering performance.

Net Profit Margin

Recovery from significant losses in 2020 to strong profitability by the end of 2022, followed by a gradual decline yet sustained positive margins through mid-2025.

Asset Turnover

Steady improvement from 2020 to late 2022, indicating enhanced asset efficiency, with a subsequent moderate decrease suggesting a slight reduction in revenue generation relative to asset base.

Financial Leverage

Increase in leverage reaching a peak in late 2020, followed by a steady decline into 2022 and stabilization at lower levels, denoting deleveraging and conservative financial structuring.

Return on Equity (ROE)

Strong negative returns in 2020 reflecting losses, followed by a robust recovery and peak in late 2022, then a tapering off trend while maintaining positive returns, signifying ongoing value creation for equity holders.

The financial data reveals several notable trends over the periods analyzed.

Tax Burden

The tax burden ratio was not available in the earlier periods but starts from 0.72 in March 31, 2022. It peaks at 1.14 in June 30, 2022, and then gradually declines, stabilizing around the 0.70 to 0.75 range towards the later periods up to June 30, 2025. This suggests some fluctuation in tax efficiency, with an overall moderate tax impact on earnings in recent quarters.

Interest Burden

The interest burden ratio shows a dramatic shift from a negative value of -0.11 in December 31, 2020, to positive and improving values starting March 31, 2022. From March 31, 2022, it maintains a high level near 0.9, indicating effective management of interest expenses initially, followed by a moderate decline towards 0.74 by June 30, 2025. This indicates increasing interest expense impacts in the latest periods, but still reflecting relatively moderate financial costs compared to the earlier loss period.

EBIT Margin

There is a significant recovery in EBIT margin over the analyzed period. The margin was deeply negative in 2020, with values such as -87.48% in September 30, 2020, and improving towards positive figures by December 31, 2020 (6.67%). It continues to increase, peaking at approximately 41% by late 2022. Subsequently, the margin declines steadily, ending near 17.29% by June 30, 2025. The recovery and high peak suggest a period of considerable operational improvement and profitability growth followed by gradual pressure or normalization.

Asset Turnover

Asset turnover improved from 0.22 in December 31, 2020, rising consistently to a peak of about 0.50 during September 30, 2022, to December 31, 2022. After this peak, turnover ratios declined steadily to roughly 0.32 by June 30, 2025. This pattern indicates stronger utilization of assets to generate sales in the middle periods followed by a modest reduction in operational efficiency in asset use in the later periods.

Financial Leverage

Financial leverage started high at 3.25 in March 31, 2020, peaking at 4.38 by June 30, 2021, and then consistently declined to 2.36 by June 30, 2025. This indicates a clear deleveraging trend over the period, reflecting a reduction in reliance on debt financing relative to equity.

Return on Equity (ROE)

ROE was deeply negative in 2020 and early 2021, measuring as low as -79.85% in September 30, 2020. It then improved markedly, achieving a peak near 45% by late 2022. Following this peak, there was a steady decline to around 6.72% by June 30, 2025. This pattern suggests a turnaround from significant losses to strong profitability, followed by a normalization or moderation of equity returns in the most recent periods.

In summary, the company exhibited a strong recovery from significant operational and financial challenges during 2020 and early 2021, reflected in improvements in EBIT margin, ROE, interest burden, and asset turnover. Alongside deleveraging, these improvements led to increased profitability and efficiency. However, after peaks in profitability and efficiency metrics around late 2022, a gradual decline towards the end of the analysis period is observed. This trend may indicate market pressures, operational normalization, or strategic shifts affecting margins, asset utilization, and returns to equity holders.

Net Profit Margin

The net profit margin exhibited a significant improvement over the observed periods. Starting with substantial negative values in early 2020, reflecting considerable losses, the margin showed a steady upward trajectory from the first quarter of 2021. It transitioned from negative territory around -83.28% in late Q1 2020 to a positive margin by early 2022, reaching a peak of approximately 36.32% in Q4 2022. Following this peak, the margin gradually declined but remained positive through to mid-2025, ending near 8.84%. This pattern suggests recovery and stabilization in profitability after a challenging initial period.

Asset Turnover

Asset turnover ratios began around 0.22 in early periods and increased steadily until late 2022, peaking at approximately 0.5 between Q4 2022 and early 2023. This indicates enhanced efficiency in utilizing assets to generate revenues. From early 2023 onwards, a gradual decline in asset turnover was observed, falling to around 0.32 by mid-2025. Though the decline represents a reduction in operational efficiency, the values remain higher compared to the early periods, signaling an overall improvement compared to the start of the timeline.

Return on Assets (ROA)

ROA followed a pattern similar to net profit margin, starting with markedly negative returns, reaching approximately -18.52% in Q1 2020. There was a consistent improvement thereafter, entering positive territory around early 2022 and climbing to a peak of about 18.32% by Q4 2022. After peaking, ROA showed a gradual decline, settling near 2.84% by mid-2025. This reflects a recovery in asset profitability but with some weakening in recent periods.

Overall Insights

The combined trends in profitability and efficiency metrics illustrate a significant turnaround from losses to profitability and improved asset utilization over the examined timeframe. Early 2020 was marked by severe negative profitability and low efficiency; subsequently, all key indicators improved markedly through 2022. However, from late 2022 onwards, a modest downward trend in these metrics suggests potential emerging pressures or normalization following strong recovery phases. The company appears to have stabilized with positive earnings and moderate asset performance but may face challenges in maintaining the peak profitability and efficiency levels achieved.

Tax Burden

The tax burden ratio shows a generally stable trend following an initial period of missing data. Starting at 0.72 in the first observed quarter (Mar 31, 2022), it peaks at 1.14 before gradually declining and stabilizing around 0.69 to 0.75 in subsequent quarters. This suggests fluctuations in tax expense relative to pre-tax earnings, with a recent tendency toward a consistent moderate tax impact.

Interest Burden

Interest burden exhibits significant improvement after an initial negative value of -0.11 (Dec 31, 2020) to positive values ranging from 0.67 to 0.93 between early 2021 and the end of 2022. This indicates a reduction in interest expense relative to EBIT, reflecting improved financing costs or earnings performance. From 2023 onward, the ratio slightly declines but remains stable between 0.74 and 0.88, suggesting consistent handling of interest-related expenses.

EBIT Margin

The EBIT margin shows a marked recovery from severely negative values at the end of 2020 (-87.48% to -19.51%) to positive territory beginning in early 2021 (6.67%), with a strong upward movement reaching a peak of 41.35% by Dec 31, 2022. Thereafter, it declines gradually but remains healthy, stabilizing between 17.29% and 26.55% in the following quarters. This reflects a significant operational turnaround with improved profitability and efficiency over the analyzed period.

Asset Turnover

The asset turnover ratio displays a gradual increase from 0.22 (Dec 31, 2020) to a peak of 0.50 by the end of 2022, indicating improved efficiency in utilizing assets to generate revenue. However, from 2023 onward there is a noticeable decline, settling around 0.31 to 0.38, which may suggest either slower revenue growth relative to asset base expansion or changing asset management strategies.

Return on Assets (ROA)

The ROA metric mirrors trends seen in EBIT margin, starting from significantly negative values (-18.52% to -0.43% during 2020) and transitioning into positive figures beginning 2021, peaking at 18.32% by the end of 2022. Post-peak, ROA diminishes steadily, stabilizing around 2.84% to 6.07% in the most recent quarters. This trend indicates initial recovery and strong asset profitability, followed by a phase of moderated returns.

Tax Burden

The tax burden ratio shows no data in the early periods but begins to be reported from March 31, 2022. Initially, the value is 0.72, increasing sharply to 1.14 in the following quarter, then gradually declining and stabilizing between 0.69 and 0.75 from subsequent periods through June 30, 2025. This suggests an initial increase in tax-related costs or effective tax rate followed by a consistent, slightly declining tax burden over time.

Interest Burden

The interest burden ratio is negative (-0.11) at December 31, 2020, indicating potentially negative earnings before tax relative to EBIT during that quarter. From March 31, 2021 onward, the interest burden improves significantly, reaching a peak value of 0.93 in December 31, 2021, and remains relatively stable around 0.74 to 0.93 through mid-2024. A downward trend appears afterwards, with the ratio declining to 0.74 by June 30, 2025. This pattern indicates initial financial stress or high interest expense that substantially improves and stabilizes, followed by a slight deterioration towards the end of the series.

EBIT Margin

The EBIT margin starts with very negative values in the middle of 2020 reaching approximately -87.48%, reflecting significant operating losses. A pronounced improvement is observed beginning late 2020, with margins turning positive and increasing sharply to a peak of 41.35% by December 31, 2021. After this peak, the margin declines modestly but remains positive, stabilizing around the mid-20% range through late 2024 and eventually falling to 17.29% by June 30, 2025. This reflects a recovery from a difficult period followed by stabilized, albeit decreased, profitability at the EBIT level.

Net Profit Margin

The net profit margin mirrors the EBIT margin trend with severe negative margins (-83.28%) in mid-2020, gradually improving into positive territory by March 31, 2021. It reaches a high of 36.32% at December 31, 2022 before declining steadily afterwards, staying above 10% but decreasing to 8.84% by the middle of 2025. This trend indicates a recovery in net profitability after substantial losses followed by a tapering off of profit margins over time, suggesting pressures on net income despite operational improvements.