SM Energy Co (SM)

Operating profit margin

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Operating income	US$ in thousands	986,906	1,579,480	209,123	-1,068,950	-69,968
Revenue	US$ in thousands	2,373,890	3,358,650	2,622,890	1,126,670	1,590,100
Operating profit margin		41.57%	47.03%	7.97%	-94.88%	-4.40%

December 31, 2023 calculation

Operating profit margin = Operating income ÷ Revenue
= $986,906K ÷ $2,373,890K
= 41.57%

SM Energy Co's operating profit margin has exhibited fluctuations over the past five years. In 2023, the operating profit margin stood at 41.57%, showing a decrease from the previous year's 47.25%. The significant drop in 2023 might indicate a decrease in operational efficiency or an increase in operating expenses compared to 2022.

Compared to the low points of -4.71% and -2.33% in 2020 and 2019 respectively, the company has shown a notable improvement in profitability over the last three years, reaching a peak in 2022. This upward trend signifies potential enhancements in cost management, revenue generation, or both. However, the decrease in 2023 warrants further investigation to understand the factors influencing the decline.

Analyzing the operating profit margin provides insights into the company's ability to generate profits from its core operations. A higher margin indicates better operational efficiency and profitability, while a lower margin suggests challenges in controlling costs or generating revenue. SM Energy Co should continue monitoring and analyzing its operating profit margin to make informed decisions and ensure sustainable financial performance.