Eversource Energy (ES)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 31.12% | 40.69% | 44.02% | 48.17% | 49.82% |
| Operating profit margin | 22.74% | 20.14% | 17.89% | 20.21% | 22.33% |
| Pretax margin | 10.45% | -2.31% | 15.18% | 15.94% | 17.51% |
| Net profit margin | 6.82% | -3.71% | 11.43% | 12.37% | 13.53% |
Eversource Energy's profitability ratios have shown a declining trend over the years.
- The Gross Profit Margin decreased from 49.82% in December 2020 to 31.12% in December 2024, indicating a reduction in the percentage of revenue retained after accounting for the cost of goods sold.
- The Operating Profit Margin decreased from 22.33% in December 2020 to 22.74% in December 2024, suggesting fluctuation in the efficiency of operations in generating profits.
- The Pretax Margin fluctuated, with a significant drop in 2023 (-2.31%) from 17.51% in December 2020, indicating challenges in generating profits before tax expenses.
- The Net Profit Margin also showed a declining trend, dropping from 13.53% in December 2020 to 6.82% in December 2024, reflecting the company's ability to convert revenue into profits after all expenses.
Overall, the profitability ratios indicate that Eversource Energy faced challenges in maintaining and enhancing its profitability during the period analyzed.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.54% | 4.31% | 4.13% | 4.11% | 4.31% |
| Return on assets (ROA) | 1.36% | -0.80% | 2.64% | 2.52% | 2.61% |
| Return on total capital | 10.82% | 4.09% | 16.44% | 14.75% | 14.90% |
| Return on equity (ROE) | 3.73% | -3.12% | 9.08% | 8.36% | 8.57% |
Eversource Energy's profitability ratios for the years 2020 to 2024 exhibit a mixed performance:
1. Operating return on assets (Operating ROA) remained relatively stable within the range of 4.11% to 4.54% over the five-year period, indicating that management is effectively generating operating profits from its assets.
2. Return on assets (ROA) showed inconsistency, fluctuating from 2.52% in 2021 to -0.80% in 2023 before recovering to 1.36% in 2024. The negative ROA in 2023 raises concerns about the company's ability to generate profits from its total assets.
3. Return on total capital increased from 14.75% in 2021 to 16.44% in 2022 before declining to 10.82% in 2024. The fluctuation in this ratio suggests that the company's effectiveness in generating returns on its total invested capital varied over the years.
4. Return on equity (ROE) exhibited a similar pattern of fluctuation, with values ranging from -3.12% in 2023 to 9.08% in 2022. The negative ROE in 2023 reflects a net loss for the shareholders, while the positive values in other years indicate some level of profitability.
Overall, Eversource Energy's profitability performance shows some level of inconsistency over the analyzed period, with fluctuations in profitability ratios such as ROA, ROE, and return on total capital. It is essential for the company to focus on improving its overall profitability to ensure sustained growth and shareholder value.