FirstEnergy Corporation (FE)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 67.52% | 63.90% | 63.14% | 69.05% | 71.55% |
| Operating profit margin | 17.63% | 17.61% | 21.05% | 24.67% | 20.04% |
| Pretax margin | 11.16% | 11.38% | 11.55% | 14.00% | 10.46% |
| Net profit margin | 7.26% | 8.56% | 3.26% | 11.53% | 10.00% |
FirstEnergy Corporation's profitability ratios show variations over the five-year period from 2020 to 2024.
1. Gross Profit Margin:
- FirstEnergy's gross profit margin decreased from 71.55% in 2020 to 63.90% in 2023, before slightly increasing to 67.52% in 2024.
- The downward trend from 2020 to 2023 may indicate increasing costs or pricing pressures impacting profitability, while the slight recovery in 2024 is a positive sign.
2. Operating Profit Margin:
- The operating profit margin saw fluctuations, with a notable increase from 20.04% in 2020 to 24.67% in 2021, followed by a decline to 17.63% in 2024.
- The initial increase indicates improved operational efficiency or cost management, but the subsequent decrease may suggest challenges in maintaining profitability.
3. Pre-tax Margin:
- FirstEnergy's pre-tax margin increased from 10.46% in 2020 to 14.00% in 2021, and then gradually declined to 11.16% in 2024.
- The fluctuation in pre-tax margin reflects changes in revenue, expenses, or tax-related factors impacting the company's profitability over the years.
4. Net Profit Margin:
- The net profit margin fluctuated from 10.00% in 2020 to 3.26% in 2022, before recovering to 7.26% in 2024.
- The significant drop in 2022 may indicate operational challenges or one-time expenses affecting profitability, while the recovery in 2024 is a positive sign for the company's bottom line.
In summary, FirstEnergy Corporation experienced fluctuations in its profitability margins over the five-year period, with varying trends in gross, operating, pre-tax, and net profit margins. The company may need to focus on cost management, operational efficiency, and revenue generation strategies to maintain and improve its profitability in the future.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.56% | 4.65% | 5.69% | 6.04% | 4.86% |
| Return on assets (ROA) | 1.88% | 2.26% | 0.88% | 2.82% | 2.43% |
| Return on total capital | 20.19% | 24.23% | 24.01% | 30.80% | 29.92% |
| Return on equity (ROE) | 7.85% | 10.56% | 3.99% | 14.79% | 14.91% |
FirstEnergy Corporation's profitability ratios show fluctuating performance over the years.
1. Operating Return on Assets (Operating ROA):
- The Operating ROA has improved from 4.86% in 2020 to 6.04% in 2021, but slightly dipped to 5.69% in 2022 before decreasing further to 4.65% in 2023 and 4.56% in 2024. This ratio reflects the company's ability to generate operating income from its assets.
2. Return on Assets (ROA):
- The ROA ratio increased from 2.43% in 2020 to 2.82% in 2021, dropped significantly to 0.88% in 2022, then recovered to 2.26% in 2023, but decreased to 1.88% in 2024. ROA measures the company's profitability in relation to its total assets.
3. Return on Total Capital:
- Return on Total Capital saw a minor increase from 29.92% in 2020 to 30.80% in 2021 and then declined to 24.01% in 2022, with a slight recovery to 24.23% in 2023 and a further decline to 20.19% in 2024. This ratio evaluates the company's ability to generate returns from all sources of capital.
4. Return on Equity (ROE):
- The ROE ratio was relatively stable, with a slight decrease from 14.91% in 2020 to 14.79% in 2021, followed by a sharp decline to 3.99% in 2022. It then moderately improved to 10.56% in 2023 before decreasing to 7.85% in 2024. ROE indicates how well the company is utilizing shareholder equity to generate profits.
Overall, the trends in these profitability ratios suggest some inconsistency in FirstEnergy Corporation's financial performance, indicating the need for further analysis to understand the underlying reasons for these fluctuations.