Exxon Mobil Corp. (NYSE:XOM)

The financial data reveals several notable trends in the company’s performance over the reported periods.

Net Operating Profit After Taxes (NOPAT)

NOPAT exhibits a recovery phase after a significant negative value in the year ending 2020. It climbs sharply from a negative position of -34,098 million USD in 2020 to positive territory in 2021, reaching 32,736 million USD and peaking in 2022 at 62,749 million USD. However, NOPAT declines in subsequent years, dropping to 37,855 million USD in 2023 and further to 31,476 million USD in 2024, indicating some volatility and a downward trend following the peak in 2022.

Cost of Capital

The cost of capital shows a gradual increase over the five-year span, rising from 10.87% in 2020 to 12.92% in 2024. This steady upward movement suggests increasing expenses associated with financing the company’s operations, which could affect profitability and investment decisions.

Invested Capital

Invested capital remains relatively stable between 2020 and 2021, showing a slight decrease from 273,920 million USD to 272,673 million USD. From 2022 onwards, it increases consistently, reaching 378,995 million USD by 2024. This growth trend reflects expanded asset base or capital deployment within the company, possibly aimed at supporting operations or future growth initiatives.

Economic Profit

Economic profit data mirrors the shifts in NOPAT but reveals a more volatile and less favorable outcome overall. Economic profit is significantly negative in 2020 (-63,885 million USD) and remains near zero in 2021 (-336 million USD), turning positive in 2022 with 24,568 million USD. However, it falls back into negative territory in the following years, registering -1,396 million USD in 2023 and worsening further to -17,490 million USD in 2024. This pattern indicates challenges in creating shareholder value beyond the cost of capital in the latter years despite periods of operational profitability.

In summary, the company experienced a recovery and peak in operating profitability around 2022, followed by declines in subsequent years. Concurrently, the cost of capital has steadily increased, and invested capital has grown substantially. The oscillation in economic profit, moving from deep losses to positive and back to negative, highlights ongoing difficulties in surpassing the cost of capital consistently, suggesting potential areas of concern in capital efficiency and value creation.

The financial data reveals significant fluctuations in the profitability metrics over the five-year period ending December 31, 2024. Both net income and net operating profit after taxes (NOPAT) demonstrate notable volatility, reflecting changing business dynamics and external factors impacting the company.

Net Income (Loss) Attributable to ExxonMobil

The company experienced a substantial net loss in the year 2020, with a figure of negative $22.44 billion. This was followed by a strong recovery in 2021, marked by a sharp turnaround to a net income of $23.04 billion. The upward trend continued robustly into 2022, reaching a peak of $55.74 billion, which represents the highest profit in the examined period. However, the subsequent years showed a moderation in profitability, with net income declining to $36.01 billion in 2023 and further to $33.68 billion in 2024. Despite these decreases, profits remained significantly positive compared to the loss in 2020.

Net Operating Profit After Taxes (NOPAT)

Similar to net income, NOPAT followed a correlated pattern. The year 2020 registered a pronounced negative figure of $34.10 billion, indicating operational challenges and tax impacts during that period. Recovery commenced in 2021 with NOPAT switching to a positive $32.74 billion, followed by a peak in 2022 at $62.75 billion, surpassing the net income peak and underscoring efficient operational performance. Afterwards, NOPAT experienced a decline to $37.86 billion in 2023 and further contraction to $31.48 billion in 2024. These trends suggest the company maintained operational profitability after taxes but faced headwinds causing reduced returns post-2022.

Overall, the data indicates that the company underwent a significant turnaround after 2020, reflecting recovery from adverse conditions that year. The peak in 2022 represents a period of considerable profitability, although the subsequent decline in the following two years points to either reduced market conditions, increased costs, or other operational challenges. Despite the decline post-2022, the company remained profitable with both net income and NOPAT well above the negative values seen in 2020.

The financial data exhibits significant fluctuations in both income tax expense (benefit) and cash operating taxes over the observed five-year period.

Income Tax Expense (Benefit)

The income tax expense started with a substantial benefit of -5,632 million USD at the end of 2020, indicating a tax advantage or credit in that year. However, this shifted markedly in 2021, changing to a positive expense of 7,636 million USD. The upward trend continued into 2022, peaking at 20,176 million USD. Although there was a decline in 2023 to 15,429 million USD, the figure remained significantly elevated compared to 2021 and 2020. By 2024, the expense decreased slightly further to 13,810 million USD, yet maintaining a higher level than in the initial years.

Cash Operating Taxes

The cash operating taxes demonstrate a strong growth trajectory from 2,695 million USD in 2020 to 7,904 million USD in 2021. This upward momentum accelerated, reaching 16,789 million USD in 2022. Following this peak, cash operating taxes slightly declined to 14,713 million USD in 2023 but rebounded modestly to 14,916 million USD in 2024. The overall pattern suggests a multi-year increase with a peak in 2022, followed by stabilization at a high level.

Overall, both tax-related metrics indicate increased tax obligations and cash outflows in the recent years, especially from 2021 onwards. The simultaneous rise in income tax expense and cash operating taxes reflects heightened tax liabilities that stabilize but remain elevated compared to 2020 levels. The initial benefit observed in 2020 may represent one-time tax credits or adjustments, followed by normalization or growth in tax expenses consistent with business conditions in the subsequent years.

Total reported debt & leases

The total reported debt and leases exhibit a significant downward trend from 2020 to 2022, decreasing from $72,802 million to $46,787 million. This reduction suggests a strategy of debt reduction or improved liability management. From 2022 onwards, the figure stabilizes, with a slight increase to $48,188 million by 2024, indicating a relatively steady level of debt in the most recent periods.

Total ExxonMobil share of equity

Shareholder equity shows a consistent upward trend over the entire period. Starting at $157,150 million in 2020, it increases steadily each year, reaching a notable $263,705 million in 2024. This growth reflects strengthening equity positions, possibly driven by retained earnings, asset appreciation, or additional capital infusion.

Invested capital

Invested capital remains relatively stable between 2020 and 2021, with a slight slight decline from $273,920 million to $272,673 million. From 2021 onwards, invested capital steadily rises, reaching $378,995 million in 2024. This upward trend may indicate increased investments in assets or expansion initiatives to support long-term operational growth.

Overall, the financial data indicates a strategic reduction and subsequent stabilization of debt, coupled with strong growth in shareholder equity. The increase in invested capital alongside equity growth suggests ongoing investment in operational capacity supported by a solid equity base, contributing to a potentially stronger financial position over the assessed period.

Economic Profit

The economic profit experienced significant fluctuations over the observed periods. Beginning with a substantial loss of approximately -63,885 million US dollars in 2020, the figure greatly improved to near breakeven at -336 million in 2021, followed by a positive shift to 24,568 million in 2022. However, this improvement was not sustained, with economic profit reverting to negative values of -1,396 million in 2023 and further declining to -17,490 million in 2024. This pattern indicates volatility in the company's ability to generate returns above its cost of capital, with a notable peak in 2022.

Invested Capital

Invested capital showed a generally upward trend throughout the periods, increasing from 273,920 million US dollars in 2020 to 378,995 million in 2024. While the growth was moderate between 2020 and 2023, a more pronounced rise occurred in 2024. This increment suggests ongoing investment or acquisition of assets possibly aimed at supporting future operational capacity or expansion, despite the challenges reflected in economic profit.

Economic Spread Ratio

The economic spread ratio, indicative of the returns over the cost of capital expressed as a percentage, followed a similar volatile pattern to economic profit. It was deeply negative at -23.32% in 2020, improved substantially to nearly zero at -0.12% in 2021, and reached a positive peak of 8.27% in 2022. Subsequent periods saw a reversal with the ratio declining to -0.45% in 2023 and further to -4.61% in 2024. This reflects fluctuating efficiency in asset utilization and profitability, correlating with the economic profit trends.

Sales and Other Operating Revenue

There is a notable upward trend in sales and other operating revenue from 2020 to 2022, with values increasing from approximately $178.6 billion to nearly $398.7 billion. This significant growth indicates an expanding top line during this period. However, in the years 2023 and 2024, revenue shows a decline and stabilization, dropping to around $334.7 billion in 2023 and slightly rising to $339.2 billion in 2024.

Economic Profit

The economic profit metric demonstrates considerable volatility over the reported periods. The company experienced a substantial economic loss in 2020, with a negative economic profit exceeding $63 billion. By 2021, this loss sharply declined to almost break even. In 2022, economic profit turned positive, reaching almost $24.6 billion, indicating a strong recovery and value creation during that year. However, this positive trend did not persist, as economic profit fell back into negative territory in 2023 and further decreased in 2024, recording losses of approximately $1.4 billion and $17.5 billion, respectively.

Economic Profit Margin

The economic profit margin follows a pattern consistent with economic profit. It was deeply negative in 2020, reflecting heavy losses relative to revenue. The margin improved dramatically in 2021, nearing neutral, and turned positive in 2022 at about 6.16%, signaling efficient profitability. Subsequently, the margin reverted to negative figures in 2023 and deepened in 2024, indicating declining operational efficiency or increased costs impacting profitability.

Overall Analysis

The data reflects a period of significant financial fluctuation. While sales revenue increased markedly until 2022, indicating strong operational performance, the economic profit and margin reveal challenges in sustaining profitability beyond that point. The shift from negative to positive economic profit in 2022 suggests effective management or favorable market conditions that year. However, the downturn in economic profit and margin in the following years may highlight emerging difficulties such as increased costs, market pressures, or other factors reducing economic value despite relatively stable sales figures. This divergence between revenue growth and declining economic profit margins warrants further investigation into cost structures and capital efficiency.