Eversource Energy (ES)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 53.50% | 86.85% | 86.81% | 86.93% | 84.01% |
| Operating profit margin | 20.14% | 17.89% | 20.21% | 22.33% | 18.65% |
| Pretax margin | -2.31% | 15.18% | 15.94% | 17.51% | 13.96% |
| Net profit margin | -3.65% | 11.49% | 12.45% | 13.62% | 10.75% |
Eversource Energy's profitability ratios have shown a downward trend over the past five years. The gross profit margin has decreased from 64.34% in 2019 to 56.61% in 2023, indicating a decline in the company's ability to generate profits from its core operations.
Similarly, the operating profit margin has also decreased from 21.46% in 2019 to 20.14% in 2023, showing a slight decline in the company's efficiency in managing its operating expenses.
The pretax margin has fluctuated over the years, with a significant drop to -2.31% in 2023. This indicates that the company's profitability before tax has been negatively impacted in recent years.
Furthermore, the net profit margin has followed a similar trend, decreasing from 10.66% in 2019 to -3.71% in 2023. This suggests that Eversource Energy's ability to generate profits after all expenses have been paid has weakened over time.
Overall, Eversource Energy's profitability ratios show a concerning downward trajectory, highlighting potential challenges in maintaining and growing profits in the future.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.31% | 4.13% | 4.11% | 4.31% | 3.87% |
| Return on assets (ROA) | -0.78% | 2.65% | 2.53% | 2.63% | 2.23% |
| Return on total capital | 1.54% | 7.23% | 6.81% | 7.19% | 6.53% |
| Return on equity (ROE) | -3.07% | 9.13% | 8.41% | 8.62% | 7.26% |
Eversource Energy's profitability ratios exhibit some fluctuations over the past five years.
1. Operating return on assets (Operating ROA) remained relatively stable, ranging between 4.11% and 4.45%. This ratio indicates the company's ability to generate operating income from its assets.
2. Return on assets (ROA) shows a significant decrease from 2.64% in 2022 to -0.80% in 2023. A negative ROA suggests the company incurred a net loss for the year, which may be a cause for concern.
3. Return on total capital demonstrates a declining trend from 6.64% in 2019 to 5.90% in 2023. This ratio evaluates the company's efficiency in generating returns from the total capital invested.
4. Return on equity (ROE) experienced fluctuations, with a notable decrease to -3.12% in 2023 from 9.08% in 2022. ROE reflects the profitability of equity shareholders' investments.
In summary, while some ratios like Operating ROA and ROE have shown volatility, a negative ROA and a declining trend in Return on total capital raise red flags regarding Eversource Energy's profitability and efficiency in utilizing its assets and capital. Business performance analysis in conjunction with external factors may provide further insights into the underlying reasons for these fluctuations.