Stock Analysis on Net
Stock Analysis on Net

Hess Corp. (NYSE:HES)

This company has been moved to the archive! The financial data has not been updated since November 2, 2023.

Common-Size Income Statement 

Hess Corp., common-size consolidated income statement

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12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Sales and other operating revenues 100.00 100.00 100.00 100.00 100.00
Gains on asset sales, net 0.89 0.39 1.86 0.34 0.51
Other, net 1.28 1.08 1.07 -0.11 1.76
Revenues and non-operating income 102.17% 101.47% 102.94% 100.23% 102.26%
Marketing, including purchased oil and gas -29.39 -27.22 -20.06 -26.73 -28.01
Operating costs and expenses -12.82 -16.45 -26.10 -19.05 -17.93
Production and severance taxes -2.25 -2.30 -2.66 -2.83 -2.70
Exploration expenses, including dry holes and lease impairment -1.84 -2.17 -7.52 -3.59 -5.73
General and administrative expenses -4.69 -4.55 -7.65 -6.11 -7.48
Depreciation, depletion and amortization -15.04 -20.45 -44.44 -32.67 -29.78
Impairment and other -0.48 -1.97 -45.55 0.00 0.00
Income (loss) before interest and income taxes 35.67% 26.37% -51.04% 9.25% 10.63%
Interest expense -4.35 -6.44 -10.03 -5.85 -6.31
Loss on debt extinguishment 0.00 0.00 0.00 0.00 -0.84
Income (loss) before income taxes 31.31% 19.94% -61.07% 3.40% 3.48%
(Provision) benefit for income taxes -9.71 -8.03 0.24 -7.10 -5.30
Net income (loss) 21.61% 11.91% -60.83% -3.70% -1.82%
Net income attributable to noncontrolling interests -3.10 -4.43 -5.44 -2.59 -2.64
Net income (loss) attributable to Hess Corporation 18.51% 7.48% -66.27% -6.28% -4.46%
Preferred stock dividends 0.00 0.00 0.00 -0.06 -0.73
Net income (loss) attributable to Hess Corporation common stockholders 18.51% 7.48% -66.27% -6.34% -5.19%

Based on: 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), 10-K (reporting date: 2018-12-31).

The analysis of the annual financial data reveals several significant trends and variations over the five-year period under review.

Revenue and Income Trends
Revenues and non-operating income as a percentage of sales and other operating revenues remained relatively stable, fluctuating slightly between approximately 100% and 103%. Gains on asset sales showed volatility, peaking notably in 2020 at 1.86% before decreasing and then rising again in 2022. "Other, net" items showed positive contributions overall except for a negative value in 2019.
Cost and Expense Patterns
Marketing expenses, including purchased oil and gas, consistently accounted for a substantial and increasing portion of sales, ranging from -20.06% to -29.39%, with a notable rise in 2022. Operating costs and expenses exhibited a decreasing trend after an increase in 2020, moving from -17.93% in 2018 to a lower -12.82% in 2022. Similarly, production and severance taxes steadily declined from -2.70% to -2.25% over the period.
Exploration and Administrative Expenses
Exploration expenses, including dry holes and lease impairment, markedly decreased from -5.73% in 2018 to -1.84% in 2022, indicating improved cost control or reduced exploration activities. General and administrative expenses also declined, from -7.48% to approximately -4.6%, signaling enhanced administrative efficiency.
Depreciation, Depletion, Amortization, and Impairment
Depreciation, depletion, and amortization rose sharply in 2020 to -44.44%, then dropped significantly to -15.04% by 2022, reflecting changes in asset base or accounting estimates. Impairment and other charges were significant in 2020 (-45.55%) but sharply reduced in subsequent years to negligible levels, which had a strong impact on operating income for that year.
Profitability Metrics
Income before interest and income taxes displayed considerable fluctuations: a modest positive margin in 2018 and 2019, a substantial loss in 2020 (-51.04%), followed by recovery in 2021 and 2022 with positive margins of 26.37% and 35.67%, respectively. Correspondingly, net income attributable to Hess Corporation common stockholders followed this pattern, with a deep loss in 2020 (-66.27%), and turned positive with 7.48% and 18.51% in the last two years, indicating a strong recovery.
Interest and Tax Expenses
Interest expense decreased over time, from -6.31% in 2018 to -4.35% in 2022, reflecting possible improved debt management or lower interest rates. The provision for income taxes showed volatility with negative rates in most years but a positive benefit in 2020 (0.24%), impacting net income outcomes.
Other Observations
Loss on debt extinguishment was reported only in 2018 at -0.84%, with no occurrences afterward. Preferred stock dividends were minimal, present only in 2018 and 2019, and absent thereafter. Net income attributable to noncontrolling interests consistently remained negative but showed a decreasing loss trend from -2.64% in 2018 to -3.10% in 2022.

In summary, the company experienced a challenging year in 2020 with significant impairment charges and steep losses, followed by a strong recovery in profitability and reduction in costs from 2021 onward. Operational efficiency improved as reflected in lower administrative, exploration, and interest expenses, while depreciation and impairment charges normalized post-2020. The financial performance in recent years signals stabilization and enhanced profitability relative to the downturn observed in 2020.