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
Pioneer Natural Resources Co., profitability ratios
Based on: 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), 10-K (reporting date: 2019-12-31).
The profitability ratios exhibit a period of significant volatility between 2019 and 2023, characterized by a severe contraction in 2020 followed by an aggressive expansion that peaked in 2022.
- Profit Margin Analysis
- The operating profit margin experienced a sharp decline from 16.09% in 2019 to 2.69% in 2020, before rebounding to 18.56% in 2021 and reaching a peak of 42.04% in 2022. A subsequent moderation occurred in 2023, with the margin settling at 33.71%. The net profit margin followed a similar trajectory, shifting from 7.82% in 2019 to a deficit of -2.85% in 2020, then climbing rapidly to 32.17% in 2022, and ending at 25.26% in 2023.
- Efficiency and Return Metrics
- Return on equity (ROE) and return on assets (ROA) mirrored the trends observed in profit margins. ROE fell from 6.24% in 2019 to -1.73% in 2020, followed by a substantial surge to 34.80% in 2022 and a decrease to 21.12% in 2023. ROA demonstrated the same pattern, dropping to -1.04% in 2020 from 3.96% in 2019, peaking at 21.95% in 2022, and moderating to 13.37% in 2023.
The observed patterns indicate a strong recovery and enhanced operational efficiency in the post-2020 period. The 2022 fiscal year represents a peak in both margin expansion and asset utilization. While a slight contraction in these ratios is evident in 2023, profitability and return levels remain significantly elevated compared to the 2019 and 2020 benchmarks.
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Operating Profit Margin
Pioneer Natural Resources Co., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | 6,531) | 10,252) | 3,317) | 189) | 1,556) | |
| Revenue from contracts with purchasers | 19,374) | 24,384) | 17,870) | 7,024) | 9,671) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 33.71% | 42.04% | 18.56% | 2.69% | 16.09% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Chevron Corp. | 15.37% | 21.42% | 14.81% | — | — | |
| ConocoPhillips | 30.57% | 36.80% | 29.84% | — | — | |
| ExxonMobil Holdings Corp. | 16.24% | 19.82% | 11.91% | — | — | |
| Operating Profit Margin, Sector | ||||||
| Oil, Gas & Consumable Fuels | 17.32% | 22.22% | 14.57% | — | — | |
| Operating Profit Margin, Industry | ||||||
| Energy | 17.27% | 21.94% | 14.46% | — | — | |
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Operating profit margin = 100 × Operating income ÷ Revenue from contracts with purchasers
= 100 × 6,531 ÷ 19,374 = 33.71%
2 Click competitor name to see calculations.
The operating profit margin over the five-year period from 2019 to 2023 exhibits significant volatility, characterized by a sharp contraction in 2020 followed by a period of aggressive expansion and a subsequent moderate correction in 2023.
- Revenue and Operating Income Trajectory
- Revenue experienced a decline from 9,671 million USD in 2019 to 7,024 million USD in 2020, which coincided with a severe drop in operating income from 1,556 million USD to 189 million USD. A strong recovery occurred in 2021 and 2022, with revenue reaching a peak of 24,384 million USD and operating income peaking at 10,252 million USD in 2022. By 2023, both metrics retracted, with revenue falling to 19,374 million USD and operating income decreasing to 6,531 million USD.
- Operating Profit Margin Fluctuations
- The operating profit margin demonstrates a dramatic swing, falling from 16.09% in 2019 to a low of 2.69% in 2020. The margin recovered to 18.56% in 2021 before surging to a peak of 42.04% in 2022. Although the margin decreased to 33.71% in 2023, it remains substantially higher than the levels observed between 2019 and 2021.
- Profitability and Efficiency Insights
- The disproportionate increase in operating income relative to revenue between 2021 and 2022 indicates a period of exceptional operational leverage or favorable external market conditions that allowed margins to more than double. While the 2023 figures show a decline from the 2022 peak, the sustained margin of 33.71% suggests a structural shift toward higher profitability compared to the pre-2022 baseline.
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Net Profit Margin
Pioneer Natural Resources Co., net profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to common stockholders | 4,894) | 7,845) | 2,118) | (200) | 756) | |
| Revenue from contracts with purchasers | 19,374) | 24,384) | 17,870) | 7,024) | 9,671) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 25.26% | 32.17% | 11.85% | -2.85% | 7.82% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Chevron Corp. | 10.85% | 15.05% | 10.04% | — | — | |
| ConocoPhillips | 19.52% | 23.80% | 17.63% | — | — | |
| ExxonMobil Holdings Corp. | 10.76% | 13.98% | 8.33% | — | — | |
| Net Profit Margin, Sector | ||||||
| Oil, Gas & Consumable Fuels | 11.63% | 15.41% | 9.78% | — | — | |
| Net Profit Margin, Industry | ||||||
| Energy | 11.68% | 15.29% | 9.70% | — | — | |
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net profit margin = 100 × Net income (loss) attributable to common stockholders ÷ Revenue from contracts with purchasers
= 100 × 4,894 ÷ 19,374 = 25.26%
2 Click competitor name to see calculations.
The financial performance between 2019 and 2023 is characterized by significant volatility, featuring a sharp contraction in 2020 followed by a period of rapid expansion and a subsequent moderate correction. The relationship between revenue and net income indicates a high degree of operating leverage, where fluctuations in top-line revenue resulted in disproportionately large swings in net profitability.
- Revenue and Net Income Trends
- Revenue declined from 9,671 million US$ in 2019 to a period low of 7,024 million US$ in 2020, which coincided with a net loss of 200 million US$. A strong recovery followed, with revenue peaking at 24,384 million US$ and net income reaching a maximum of 7,845 million US$ in 2022. In 2023, a downward adjustment occurred, with revenue decreasing to 19,374 million US$ and net income falling to 4,894 million US$.
- Net Profit Margin Evolution
- The net profit margin exhibited extreme variance over the five-year period. After starting at 7.82% in 2019, the margin turned negative to -2.85% in 2020. A recovery trend emerged in 2021 with a margin of 11.85%, which surged to a peak of 32.17% in 2022. Although the margin contracted to 25.26% in 2023, it remains substantially elevated compared to the 2019 and 2020 levels, suggesting a sustained increase in profitability relative to revenue.
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Return on Equity (ROE)
Pioneer Natural Resources Co., ROE calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to common stockholders | 4,894) | 7,845) | 2,118) | (200) | 756) | |
| Equity | 23,171) | 22,541) | 22,837) | 11,569) | 12,119) | |
| Profitability Ratio | ||||||
| ROE1 | 21.12% | 34.80% | 9.27% | -1.73% | 6.24% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Chevron Corp. | 13.28% | 22.27% | 11.24% | — | — | |
| ConocoPhillips | 22.23% | 38.91% | 17.79% | — | — | |
| ExxonMobil Holdings Corp. | 17.58% | 28.58% | 13.67% | — | — | |
| ROE, Sector | ||||||
| Oil, Gas & Consumable Fuels | 16.46% | 27.31% | 13.24% | — | — | |
| ROE, Industry | ||||||
| Energy | 16.67% | 26.98% | 13.21% | — | — | |
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROE = 100 × Net income (loss) attributable to common stockholders ÷ Equity
= 100 × 4,894 ÷ 23,171 = 21.12%
2 Click competitor name to see calculations.
The financial performance between 2019 and 2023 is characterized by significant volatility in net income and a substantial expansion of the equity base. Return on Equity (ROE) mirrored these fluctuations, transitioning from moderate positivity to a temporary negative state before achieving a peak and subsequent normalization.
- Net Income Volatility
- Net income experienced extreme variance, moving from 756 million US$ in 2019 to a net loss of 200 million US$ in 2020. A strong recovery ensued, with net income increasing to 2,118 million US$ in 2021 and peaking at 7,845 million US$ in 2022, before declining to 4,894 million US$ in 2023.
- Equity Base Expansion
- The equity position underwent a significant increase between 2020 and 2021, rising from 11,569 million US$ to 22,837 million US$. This expanded capital base remained relatively stable over the following two years, closing at 23,171 million US$ by the end of 2023.
- Return on Equity (ROE) Trends
- ROE shifted from 6.24% in 2019 to -1.73% in 2020, reflecting the period of net loss. A sharp upward trajectory followed, with ROE reaching a high of 34.80% in 2022, driven by the surge in net income. In 2023, the ROE moderated to 21.12%, a decline attributed to the reduction in net earnings relative to the sustained high equity level.
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Return on Assets (ROA)
Pioneer Natural Resources Co., ROA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to common stockholders | 4,894) | 7,845) | 2,118) | (200) | 756) | |
| Total assets | 36,613) | 35,740) | 36,811) | 19,229) | 19,067) | |
| Profitability Ratio | ||||||
| ROA1 | 13.37% | 21.95% | 5.75% | -1.04% | 3.96% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Chevron Corp. | 8.17% | 13.76% | 6.52% | — | — | |
| ConocoPhillips | 11.42% | 19.91% | 8.91% | — | — | |
| ExxonMobil Holdings Corp. | 9.57% | 15.10% | 6.80% | — | — | |
| ROA, Sector | ||||||
| Oil, Gas & Consumable Fuels | 9.31% | 15.25% | 6.99% | — | — | |
| ROA, Industry | ||||||
| Energy | 9.28% | 14.84% | 6.84% | — | — | |
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROA = 100 × Net income (loss) attributable to common stockholders ÷ Total assets
= 100 × 4,894 ÷ 36,613 = 13.37%
2 Click competitor name to see calculations.
The financial performance between 2019 and 2023 is characterized by significant volatility in profitability and a substantial expansion of the asset base. The return on assets (ROA) followed a fluctuating trajectory, reflecting a period of contraction followed by an aggressive surge and a subsequent moderation.
- Return on Assets (ROA) Trend
- ROA exhibited a sharp decline from 3.96% in 2019 to a negative 1.04% in 2020. A strong recovery occurred in 2021, with the ratio rising to 5.75%, followed by a peak of 21.95% in 2022. By the end of 2023, the ROA moderated to 13.37%, remaining significantly higher than the pre-2022 levels.
- Net Income Volatility
- Profitability fluctuated considerably, moving from a net income of 756 million US dollars in 2019 to a net loss of 200 million US dollars in 2020. A rapid upward trend ensued, with net income reaching 2,118 million US dollars in 2021 and peaking at 7,845 million US dollars in 2022, before decreasing to 4,894 million US dollars in 2023.
- Asset Base Expansion
- The total asset base remained relatively stable between 2019 and 2020, hovering around 19 billion US dollars. However, a significant increase is observed in 2021, where total assets surged to 36,811 million US dollars, representing an increase of approximately 91% in a single year. Assets remained elevated through 2023, closing at 36,613 million US dollars.
- Efficiency and Profitability Correlation
- The spike in ROA during 2022 indicates that net income growth far outpaced the growth of the asset base. Despite the doubling of assets in 2021, the company achieved its highest efficiency in 2022, suggesting that the expanded asset base was leveraged effectively to generate record net income during that period.
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