Lumen Technologies Inc (LUMN)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 100.00% | 50.92% | 54.98% | 56.89% | 56.87% |
| Operating profit margin | 3.51% | -65.84% | 20.25% | 21.77% | 17.03% |
| Pretax margin | -1.75% | -70.32% | -5.67% | 13.72% | -3.78% |
| Net profit margin | -0.42% | -70.74% | -8.86% | 10.33% | -5.95% |
Based on the provided data, let's analyze the profitability ratios of Lumen Technologies Inc:
1. Gross Profit Margin: Lumen Technologies Inc has consistently maintained a relatively stable gross profit margin over the years, ranging from 50.92% in 2023 to a significant increase to 100.00% in 2024. This indicates the company's ability to effectively manage its production costs and generate profit from its core operations.
2. Operating Profit Margin: The operating profit margin shows fluctuations in Lumen Technologies Inc's ability to generate profit from its core business activities. The company experienced a notable increase from 17.03% in 2020 to 21.77% in 2021, followed by a decrease to 3.51% in 2024. The negative operating profit margin in 2023 (-65.84%) may indicate challenges in controlling operating expenses relative to revenues during that period.
3. Pretax Margin: Lumen Technologies Inc's pretax margin shows varying levels of profitability before taxes. The company experienced positive pretax margins in 2021 (13.72%) and 2020 (-3.78%), indicating profitability, while facing losses in 2022 (-5.67%), 2023 (-70.32%), and 2024 (-1.75%t). The negative margins in 2022, 2023, and 2024 may suggest significant expenses or impairments affecting the company's profitability.
4. Net Profit Margin: The net profit margin reflects Lumen Technologies Inc's bottom-line profitability after all expenses have been deducted. The company experienced profitability in 2021 (10.33%) and a loss in the other years, with the most significant loss in 2023 (-70.74%). The positive net profit margin in 2021 indicates the company's ability to generate profit, while the negative margins in other years suggest challenges in controlling expenses or facing exceptional losses.
Overall, Lumen Technologies Inc's profitability ratios demonstrate fluctuations in profitability over the years, with varying levels of success in generating profits from core operations and controlling expenses. Further analysis of the reasons behind these fluctuations would provide deeper insights into the company's financial performance.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 1.37% | -28.17% | 7.76% | 7.39% | 5.94% |
| Return on assets (ROA) | -0.16% | -30.27% | -3.40% | 3.51% | -2.07% |
| Return on total capital | 246.12% | -2,177.22% | 3.27% | 34.97% | 7.38% |
| Return on equity (ROE) | -11.85% | -2,469.54% | -14.83% | 17.17% | -11.04% |
Lumen Technologies Inc's profitability ratios reflect a mixed performance over the past five years. The Operating ROA has shown improvement from 5.94% in 2020 to 7.76% in 2022, indicating the company's ability to generate operating income from its assets. However, there was a significant decline to -28.17% in 2023, before recovering slightly to 1.37% in 2024.
The ROA, which indicates overall profitability, fluctuated widely from a negative -2.07% in 2020 to -30.27% in 2023. Although there was improvement to 3.51% in 2021 and a further recovery to -0.16% in 2024, the negative figures suggest the company's challenges in generating profits relative to its total assets.
The Return on Total Capital saw a remarkable increase from 7.38% in 2020 to 246.12% in 2024, indicating potential efficiency in utilizing both debt and equity resources to generate returns. However, the drastic decline to -2,177.22% in 2023 raises concerns about the effectiveness of the company's capital deployment strategies.
The ROE, which measures profitability from the shareholders' perspective, showed a similar pattern of fluctuation. After starting at a negative -11.04% in 2020, there was improvement to 17.17% in 2021. Nevertheless, the ratio turned negative again in the following years, reaching a significant low of -2,469.54% in 2023, before recovering slightly to -11.85% in 2024.
In conclusion, Lumen Technologies Inc's profitability ratios exhibit inconsistency and volatility, indicating challenges in maintaining stable profitability and effectively utilizing its assets and capital. Monitoring these ratios closely will be crucial for assessing the company's financial performance and sustainability in the future.