Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Return on Sales
Return on Investment
Occidental Petroleum Corp., profitability ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The profitability profile between 2020 and 2024 exhibits a significant volatility cycle, characterized by a severe contraction in 2020, a peak in profitability in 2022, and a subsequent gradual decline through the end of 2024.
- Profit Margin Trends
- Operating and net profit margins underwent a drastic reversal from deep negative positions in 2020 (-79.89% and -83.28%, respectively) to a high point in 2022, where operating margin reached 38.32% and net margin reached 36.32%. Following this peak, both metrics experienced a steady compression, closing 2024 at 16.40% and 11.43%.
- Return on Equity (ROE)
- ROE demonstrated extreme fluctuation, shifting from a loss of -79.85% in 2020 to a peak of 44.22% in 2022. This was followed by a sharp decrease in 2023 to 15.52% and a further decline to 8.95% by December 31, 2024.
- Return on Assets (ROA)
- ROA mirrored the broader profitability trend, recovering from -18.52% in 2020 to a high of 18.32% in 2022. The subsequent years showed a consistent downward trajectory, with ROA falling to 6.35% in 2023 and concluding at 3.58% in 2024.
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Operating Profit Margin
Occidental Petroleum Corp., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income (loss) | 4,383) | 6,840) | 14,037) | 4,566) | (14,228) | |
| Net sales | 26,725) | 28,257) | 36,634) | 25,956) | 17,809) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 16.40% | 24.21% | 38.32% | 17.59% | -79.89% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Chevron Corp. | 14.63% | 15.37% | 21.42% | 14.81% | — | |
| ConocoPhillips | 26.64% | 30.57% | 36.80% | 29.84% | — | |
| ExxonMobil Holdings Corp. | 14.74% | 16.24% | 19.82% | 11.91% | — | |
| Operating Profit Margin, Sector | ||||||
| Oil, Gas & Consumable Fuels | 15.81% | 17.32% | 22.22% | 14.57% | — | |
| Operating Profit Margin, Industry | ||||||
| Energy | 15.82% | 17.27% | 21.94% | 14.46% | — | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Operating profit margin = 100 × Operating income (loss) ÷ Net sales
= 100 × 4,383 ÷ 26,725 = 16.40%
2 Click competitor name to see calculations.
The financial trajectory from 2020 to 2024 is characterized by a sharp recovery from a significant operating loss, followed by a period of peak profitability and a subsequent moderate contraction in operating efficiency.
- Operating Profit Margin Trends
- A dramatic reversal is observed between 2020 and 2022, where the operating profit margin shifted from a deficit of -79.89% to a peak of 38.32%. Following this peak, a consistent downward trend occurred, with the margin compressing to 24.21% in 2023 and further declining to 16.40% by December 31, 2024.
- Operating Income and Revenue Correlation
- The recovery phase was driven by a substantial increase in both net sales and operating income. Net sales rose from US$ 17,809 million in 2020 to a high of US$ 36,634 million in 2022, coinciding with the maximum operating income of US$ 14,037 million. However, the subsequent two years show a synchronized decline in both metrics, as net sales dropped to US$ 26,725 million and operating income fell to US$ 4,383 million by the end of 2024.
- Profitability Sustainability
- While the company successfully transitioned from a significant operating loss of US$ 14,228 million in 2020 to sustained profitability, the most recent data indicates a contraction in the ability to convert sales into operating profit. The reduction in the operating profit margin from its 2022 peak suggests a period of diminishing operating leverage or increasing operational costs relative to revenue generation.
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Net Profit Margin
Occidental Petroleum Corp., net profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Occidental | 3,056) | 4,696) | 13,304) | 2,322) | (14,831) | |
| Net sales | 26,725) | 28,257) | 36,634) | 25,956) | 17,809) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 11.43% | 16.62% | 36.32% | 8.95% | -83.28% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Chevron Corp. | 9.13% | 10.85% | 15.05% | 10.04% | — | |
| ConocoPhillips | 16.89% | 19.52% | 23.80% | 17.63% | — | |
| ExxonMobil Holdings Corp. | 9.93% | 10.76% | 13.98% | 8.33% | — | |
| Net Profit Margin, Sector | ||||||
| Oil, Gas & Consumable Fuels | 10.31% | 11.63% | 15.41% | 9.78% | — | |
| Net Profit Margin, Industry | ||||||
| Energy | 10.43% | 11.68% | 15.29% | 9.70% | — | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net profit margin = 100 × Net income (loss) attributable to Occidental ÷ Net sales
= 100 × 3,056 ÷ 26,725 = 11.43%
2 Click competitor name to see calculations.
The company experienced a period of extreme financial volatility between 2020 and 2024, characterized by a sharp transition from severe losses to high profitability, followed by a gradual contraction in margins.
- Net Income Volatility
- A significant recovery is observed starting in 2021, following a substantial net loss of US$ 14,831 million in 2020. Net income peaked in 2022 at US$ 13,304 million before entering a downward trend, falling to US$ 4,696 million in 2023 and US$ 3,056 million in 2024.
- Net Sales Trajectory
- Revenue grew consistently from 2020 to 2022, rising from US$ 17,809 million to a peak of US$ 36,634 million. However, a reversal occurred in the subsequent two years, with net sales declining to US$ 28,257 million in 2023 and further to US$ 26,725 million in 2024.
- Net Profit Margin Dynamics
- The net profit margin mirrors the volatility of net income, shifting from a deficit of -83.28% in 2020 to a maximum of 36.32% in 2022. Since that peak, the margin has steadily compressed, dropping to 16.62% in 2023 and 11.43% in 2024, suggesting a decrease in overall operational profitability relative to sales volume.
The synchronization of the peaks in net sales and net profit margin in 2022 indicates a period of optimal financial performance. The subsequent decline in both metrics through 2024 suggests a contraction in the company's ability to maintain high-margin returns as sales volumes decreased.
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Return on Equity (ROE)
Occidental Petroleum Corp., ROE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Occidental | 3,056) | 4,696) | 13,304) | 2,322) | (14,831) | |
| Stockholders’ equity | 34,159) | 30,250) | 30,085) | 20,327) | 18,573) | |
| Profitability Ratio | ||||||
| ROE1 | 8.95% | 15.52% | 44.22% | 11.42% | -79.85% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Chevron Corp. | 11.59% | 13.28% | 22.27% | 11.24% | — | |
| ConocoPhillips | 14.27% | 22.23% | 38.91% | 17.79% | — | |
| ExxonMobil Holdings Corp. | 12.77% | 17.58% | 28.58% | 13.67% | — | |
| ROE, Sector | ||||||
| Oil, Gas & Consumable Fuels | 12.60% | 16.46% | 27.31% | 13.24% | — | |
| ROE, Industry | ||||||
| Energy | 12.96% | 16.67% | 26.98% | 13.21% | — | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROE = 100 × Net income (loss) attributable to Occidental ÷ Stockholders’ equity
= 100 × 3,056 ÷ 34,159 = 8.95%
2 Click competitor name to see calculations.
The return on equity (ROE) exhibited extreme volatility between 2020 and 2024, characterized by a sharp recovery from a deep deficit followed by a gradual normalization period.
- Earnings Recovery and Peak Performance
- A significant turnaround occurred between 2020 and 2022. Net income shifted from a loss of 14,831 million US$ in 2020 to a peak profit of 13,304 million US$ in 2022. Consequently, ROE transitioned from -79.85% to a period high of 44.22%, reflecting a phase of exceptional capital efficiency and rapid earnings growth.
- Equity Base Expansion
- Stockholders' equity demonstrated a consistent upward trajectory throughout the five-year period, increasing from 18,573 million US$ in 2020 to 34,159 million US$ by the end of 2024. This steady growth in the equity base provided a larger capital cushion but also increased the net income threshold required to sustain high ROE levels.
- Post-Peak Normalization and Compression
- Following the 2022 peak, a downward trend in ROE is observed. While the equity base continued to expand, net income declined to 4,696 million US$ in 2023 and further to 3,056 million US$ in 2024. This divergence resulted in ROE compressing to 15.52% and 8.95%, respectively, indicating a reduction in the rate of return generated on shareholders' capital toward the end of the period.
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Return on Assets (ROA)
Occidental Petroleum Corp., ROA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Occidental | 3,056) | 4,696) | 13,304) | 2,322) | (14,831) | |
| Total assets | 85,445) | 74,008) | 72,609) | 75,036) | 80,064) | |
| Profitability Ratio | ||||||
| ROA1 | 3.58% | 6.35% | 18.32% | 3.09% | -18.52% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Chevron Corp. | 6.87% | 8.17% | 13.76% | 6.52% | — | |
| ConocoPhillips | 7.53% | 11.42% | 19.91% | 8.91% | — | |
| ExxonMobil Holdings Corp. | 7.43% | 9.57% | 15.10% | 6.80% | — | |
| ROA, Sector | ||||||
| Oil, Gas & Consumable Fuels | 7.27% | 9.31% | 15.25% | 6.99% | — | |
| ROA, Industry | ||||||
| Energy | 7.37% | 9.28% | 14.84% | 6.84% | — | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROA = 100 × Net income (loss) attributable to Occidental ÷ Total assets
= 100 × 3,056 ÷ 85,445 = 3.58%
2 Click competitor name to see calculations.
The analysis of the Return on Assets (ROA) between 2020 and 2024 reveals a period of extreme volatility, characterized by a sharp recovery from significant losses followed by a gradual normalization of profitability.
- Net Income Trends
- A substantial financial turnaround is observed beginning in 2021, following a net loss of 14,831 million USD in 2020. Profitability peaked in 2022 with a net income of 13,304 million USD. However, a downward trajectory followed in the subsequent two years, with net income decreasing to 4,696 million USD in 2023 and further contracting to 3,056 million USD by the end of 2024.
- Asset Base Evolution
- Total assets experienced a gradual decline from 80,064 million USD in 2020 to a low of 72,609 million USD in 2022. This trend reversed in 2023 and accelerated in 2024, with total assets reaching a five-year high of 85,445 million USD. This expansion of the asset base in the final year occurred simultaneously with declining net income.
- Return on Assets (ROA) Performance
- The ROA mirrored the volatility of net income, shifting from a deep negative return of -18.52% in 2020 to a peak efficiency of 18.32% in 2022. The subsequent decline to 6.35% in 2023 and 3.58% in 2024 indicates a reduction in the company's ability to generate profit from its assets. The sharp drop in ROA in 2024 is attributed to the dual impact of decreasing net income and a significant increase in the total asset denominator.
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