STOCK SUMMARY 29/10/2022

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NASDAQ-Adv: 3,155 Dec: 1,488 NYSE-Adv: 3,122 Dec: 1,089
(Source: Nasdaq)

Exxon Mobil Corp (XOM.N) shattered expectations on Friday as soaring energy prices fueled a record quarterly profit, nearly matching that of tech giant Apple.

Its net profit of $19.66 billion in the third quarter was well above Wall Street’s recently raised forecast, with surging natural gas and high oil prices putting its profit within reach of the $20.7 billion net profit. ‘Apple for the same period.

As recently as 2013, Exxon ranked as the largest publicly traded US company by market value – a position now held by Apple. Exxon shares jumped 2% in premarket trading to $109.80, a new high.

Oil company profits have soared this year as rising demand and an undersupplied energy market collided with Western sanctions on Russia over its invasion of Ukraine. US gas and oil exports to Europe have surged and promise to set industry profit records.

The major U.S. oil producer reported earnings per share of $4.68, beating the Wall Street consensus of $3.89, helped by a huge increase in natural gas earnings, still high oil prices and strong fuel sales.

“Where others have retreated in the face of uncertainty and a historic downturn, retreating and retreating, this company has moved forward, continuing to invest,” chief executive Darren Woods told investors. Its quarterly earnings “reflect that deep commitment” as well as higher prices, he added.

Exxon led record gains among the oil majors in the second quarter and overtook Shell Plc (SHEL.L) and TotalEnergies SE (TTEF.PA) with profits nearly twice as big on continued fossil fuel bets as the competitors were redirecting their investments towards renewable energies.

Exxon took in $43 billion in the first nine months of this year, up 19% from the same period in 2008, when oil prices traded at a record high of $140 a barrel.

Revenues from pumping oil and gas tripled in the last quarter, while profits from the sale of motor fuels increased tenfold from year-ago levels. Natural gas sales in Europe and growing demand for diesel fuel led to results that exceeded the company’s expectations.

“The refining business – both in the US and internationally – was the strongest performer,” Third Bridge analyst Peter McNally said.

These rising fuel profits have renewed US President Joe Biden’s calls for companies to invest in generating the windfall from this year’s soaring energy prices rather than buy back their own shares.

Exxon will maintain its $30 billion share buyback through 2023 while increasing dividends, Chief Financial Officer Kathryn Mikells told Reuters. On Friday, it declared a fourth-quarter dividend of 91 cents per share, up 3 cents, and will pay out $15 billion to shareholders this year.

Exxon said its U.S. oil and gas production in the Permian Basin was nearly 560,000 barrels of oil and gas per day (boed), a record high. Production for the year will increase about 20% from 2021, CEO Woods said.

“We are optimizing and adjusting our development plans,” he told analysts, as the full-year production gain was lower than the 25% increase Exxon had forecast in February.

The results were also helped by an increase of almost 100,000 boed from the previous quarter in Guyana, where Exxon leads a consortium responsible for all production in the South American nation.

But its withdrawal from Russia has reduced its overall production forecast for the year by about 100,000 barrels per day. Exxon said its Russian assets had been expropriated.

“We’re going to end up at about 3.7 million barrels per day for the whole year,” Mikells said, down from the 3.8 million target set in February.
Source: Reuters (reporting by Sabrina Valle; editing by Ana Nicolaci da Costa and Jonathan Oatis)

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