Bristol-Myers Squibb Co. (NYSE:BMY)

The financial data reveals notable fluctuations and trends across the analyzed periods.

Net Operating Profit After Taxes (NOPAT)

There is a considerable volatility in NOPAT values over the five years. The period begins with a significant loss of -6822 million USD in 2020, followed by a recovery to positive territory reaching 6656 million USD in 2021. The amount then declines over the next two years to 4571 million USD in 2022 and 5869 million USD in 2023, before experiencing a sharp reversal into a substantial loss of -9292 million USD in 2024. This pattern indicates unstable operating performance and challenges in sustaining profitability.

Cost of Capital

The cost of capital shows a gradual upward trend from 7.24% in 2020 to 7.99% in 2022, which then slightly decreases and stabilizes around 7.5% to 7.54% in 2023 and 2024. Overall, the cost of capital has increased moderately during the period, reflecting potential changes in risk perception or market conditions.

Invested Capital

Invested capital demonstrates a consistent decline year over year, dropping from 90,149 million USD in 2020 to 62,654 million USD in 2024. This steady reduction suggests asset divestiture, capital expenditure decreases, or efficiencies that reduce the capital base, which may impact future revenue generation capacity.

Economic Profit

Economic profit parallels the instability seen in NOPAT, starting at a large negative value of -13,346 million USD in 2020, improving to a modest positive profit of 567 million USD in 2021, then falling back into negative territory at -1,162 million USD in 2022. It rebounds again to a positive 798 million USD in 2023 before sharply declining to -14,018 million USD in 2024. These swings highlight variable returns over and above the cost of capital, indicating difficulty in consistently creating shareholder value.

Net Earnings (Loss) Attributable to BMS

The net earnings exhibit significant volatility over the five-year period. In 2020, the company experienced a substantial loss of approximately $9.015 billion. This was followed by a strong recovery in 2021, with net earnings turning positive at around $6.994 billion. The positive trend continued through 2022 and 2023, with earnings of $6.327 billion and $8.025 billion, respectively, indicating operational improvements and profitability restoration. However, in 2024, the net earnings again declined sharply to a loss of about $8.948 billion, suggesting potential one-time charges, operational challenges, or market conditions adversely affecting profitability.

Net Operating Profit After Taxes (NOPAT)

The NOPAT values reflect a similar pattern of volatility as net earnings. In 2020, the company reported a significant negative NOPAT of approximately $6.822 billion. The following year showed a substantial positive turnaround with NOPAT reaching $6.656 billion. Despite this improvement, the subsequent years showed a decline in NOPAT, falling to $4.571 billion in 2022 and recovering slightly to $5.869 billion in 2023. In 2024, there was a notable decline to a negative $9.292 billion, aligning with the net earnings loss. This suggests that operational efficiency and tax impacts fluctuated considerably, with a sharp deterioration in 2024 likely driven by operational issues or exceptional expenses.

Overall Trend and Insights

Both net earnings and NOPAT demonstrate a pronounced cyclical pattern, with strong losses in 2020 followed by recovery in the subsequent years up to 2023, and then a substantial reversal back to losses in 2024. This pattern indicates that while the company was able to restore profitability after a difficult 2020, it encountered renewed challenges in 2024. The divergence between earnings and operating profit in some years suggests that non-operating factors, such as extraordinary items or tax effects, may have influenced net profitability. The data points to the necessity for a deeper review of underlying causes behind the 2024 downturn, including potential one-time charges, market dynamics, or changes in operational efficiency.

Income Tax Provision

The income tax provision shows a fluctuating trend over the five-year period. Starting at 2,124 million US dollars in 2020, it declined significantly to 1,084 million in 2021, followed by a moderate increase to 1,368 million in 2022. In the subsequent years, the provision dropped sharply to 400 million in 2023 but experienced a slight rebound to 554 million in 2024. This pattern suggests variability in taxable income or changes in tax strategy or regulations impacting the provision calculation.

Cash Operating Taxes

Cash operating taxes display a different trajectory compared to income tax provisions, indicating potential timing differences or other tax-related factors. The amount nearly doubled from 1,445 million in 2020 to 2,764 million in 2021, followed by a further substantial increase to 4,376 million in 2022. However, in 2023, cash operating taxes declined to 3,947 million and continued to drop to 3,068 million in 2024. Despite the reductions in recent years, cash tax payments remain significantly higher than in 2020. This trend may reflect changes in cash flow management, tax payment scheduling, or adjustments related to tax liabilities and credits.

Overall Insights

The divergence between income tax provision and cash operating taxes is notable. While income tax provisions generally decreased over the period with some volatility, cash operating taxes rose sharply before declining in the last two years but still remained elevated relative to 2020. These contrasting patterns could indicate differences in accounting recognition of tax expenses versus actual cash outflows. The fluctuations in both indicators highlight the importance of analyzing tax-related cash impacts separately from accounting provisions to fully understand the company's tax position and its effect on liquidity and profitability.

Total reported debt & leases

There is a noticeable reduction in total reported debt and leases from 2020 to 2022, falling from approximately $51.7 billion to about $40.7 billion. However, the debt level stabilizes around $41.5 billion in 2023 before increasing significantly to $51.2 billion in 2024, approaching the 2020 debt level once again.

Total BMS shareholders’ equity

The shareholders’ equity shows a consistent declining trend over the five-year period. Starting at around $37.8 billion in 2020, it decreases gradually each year, falling to roughly $16.3 billion in 2024. This decline is particularly pronounced between 2023 and 2024, where equity drops by nearly 45%, indicating potential challenges impacting the company’s net worth.

Invested capital

Invested capital follows a downward trend over the period, beginning at approximately $90.1 billion in 2020 and decreasing steadily every year to around $62.7 billion in 2024. The continuous reduction suggests contraction in the company's asset base or potential divestitures and may relate to the simultaneously falling equity and fluctuating debt levels.

Economic Profit

The economic profit exhibited significant volatility over the observed period. Starting from a substantial negative value in 2020, the figure improved sharply to a positive value in 2021. However, this improvement was not sustained, as the value declined to a negative figure again in 2022, rebounded modestly in 2023, and then fell dramatically to a large negative amount in 2024. This pattern indicates fluctuating profitability performance, with alternating periods of economic loss and gain, ultimately culminating in a substantial downturn in the final year.

Invested Capital

Invested capital displayed a consistent downward trend throughout the five-year span. From a starting point above 90 billion US dollars in 2020, the amount steadily decreased each year, reaching approximately 62.7 billion US dollars by the end of 2024. This decline suggests ongoing divestitures, asset impairments, or strategic reductions in capital investment, reflecting a shrinking asset base over time.

Economic Spread Ratio

The economic spread ratio fluctuated considerably, mirroring the trends observed in economic profit. Initially, there was a pronounced negative spread in 2020, which turned slightly positive in 2021. This was followed by another negative reading in 2022, a return to a positive value in 2023, and a sharp decline to a significant negative spread in 2024. Such variability indicates unstable returns on invested capital relative to cost, with the final year experiencing notably poor performance in terms of economic value creation.

Revenue Trends

Revenues displayed moderate fluctuations over the period, increasing from 42,518 million US dollars in 2020 to 46,385 million US dollars in 2021. After a slight decrease to 46,159 million US dollars in 2022, revenues continued to decline to 45,006 million US dollars in 2023. However, the figure rebounded notably to reach 48,300 million US dollars in 2024, marking the highest revenue level within the observed timeframe.

Economic Profit Trends

The economic profit metric exhibited significant volatility with alternating positive and negative values. In 2020, there was a substantial economic loss of 13,346 million US dollars. This reversed to a modest positive economic profit of 567 million US dollars in 2021. The trend reverted again in 2022 with an economic loss of 1,162 million US dollars, followed by a positive value of 798 million US dollars in 2023. Finally, 2024 showed a sharp decline to an economic loss of 14,018 million US dollars, the largest loss over the five-year span.

Economic Profit Margin Trends

The economic profit margin mirrored the patterns observed in economic profit, moving between negative and slightly positive figures. Starting with a deeply negative margin of -31.39% in 2020, it improved significantly to a positive 1.22% in 2021. The margin turned negative again at -2.52% in 2022, then improved to 1.77% in 2023. In 2024, the margin dropped dramatically to -29.02%, closely reflecting the severe economic loss experienced in that year.

Overall Insights

The data indicates a pattern of alternating profitability, with no sustained growth in economic profit despite relatively stable and somewhat increasing revenue levels. The large negative economic profits and margins in 2020 and 2024 suggest significant challenges during those years, potentially linked to increased costs, investments, or other financial pressures that outweighed revenue gains. Positive economic profit years (2021 and 2023) were associated with slight improvements in economic profit margins, yet these were insufficient to sustain long-term profitability. The disparity between rising revenues and fluctuating economic profit margins points toward underlying efficiency or cost structure issues that impact overall profitability.