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Exxon Latest Report Shows Highest Quarterly Profit in Years and Revenue Underperformance

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by Tolu Ajiboye · 3 min read
Exxon Latest Report Shows Highest Quarterly Profit in Years and Revenue Underperformance
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Although the Exxon quarterly report shows the highest profit in years for the oil and gas giant, revenue fell short of Wall Street’s expectations.

American multinational oil and gas corporation Exxon Mobil Corp (NYSE: XOM) announced on Friday that its Q3 quarterly profit was at its highest in years. The company credited improving demand, higher commodity prices, and streamlined operations for this positive development. As Exxon’s chairman and CEO Darren Woods expressed in a statement:

“All three of our core businesses generated positive earnings during the quarter, with strong operations and cost control, as well as increased realizations and improved demand for fuels.”

Exxon Quarterly Report by the Numbers: Profit and Other Indicators

According to the posted earnings report, Exxon earned $1.58 per share in the third quarter on an adjusted basis. This was just ahead of the $1.56 per share given by analysts surveyed by Refinitiv. However, Exxon’s revenue stood at $73.79 billion, which was some way off the $76.34 billion target set by Wall Street. Despite this, the company’s Q3 result is a testament to an overall improvement from the second quarter following the pandemic. In the second quarter, Exxon earned $1.10 per share on revenue of $67.74 billion. According to FactSet, the leading oil and gas company’s $1.58 earnings per share is the biggest adjusted quarterly profit since 2014.

Headquartered in Irving, Texas, Exxon gave its cash flow from operating activities at $12.1 billion, which funded capital investments, debt reduction, and shareholder dividend. In addition, the company announced its first dividend hike in over two years earlier this week. On Friday, Exxon announced that beginning in 2022, it intends to start a share repurchase program of up to $10 billion. Furthermore, this initiative will span the next 12 to 24 months, according to the oil giant.

Company shareholders are calling for capital discipline in light of the pandemic’s aftermath. Exxon and the entire energy sector as a whole have broadly recovered from the debilitating effects of Covid. In fact, the leading oil and gas company had to implement aggressive cost-cutting measures as part of its recovery strategy. However, it still expects its capital program for this year to come in at the lower end of its previously outlined $16-$19 billion range.

Exxon Has Come Some Way Since 2020’s Rough Pandemic-Induced Period

Exxon’s revenue surged by approximately 60% year over year. During the third quarter of 2020, the oil giant’s revenue was down nearly 30% to $46.2 billion – losing $680 million. In addition, the company lost 18 cents per share on an adjusted basis. Part of the damage control Exxon undertook back then to negate the effects of the loss was to downsize its US workforce by 1,900 employees. Also, the company further suggested that it may potentially reduce its global workforce by as much as 15%.

During the latest quarter (Q3 2021) as part of its operations, Exxon spent $3.9 billion on capital and exploration productions. In addition, the oil company’s oil-equivalent production was 3.7 million barrels per day. Exxon’s shares experienced an uptick of 1% in premarket trading on Friday. As the market opened, the stock is 0.19% up.  Furthermore, the company’s stock is up 56% for the year.

Business News, Market News, News, Stocks
Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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