Energy
Friday, February 2nd, 2024 6:54 pm EDT
Key Points
- Strong Financial Performance: Exxon Mobil reported quarterly earnings that exceeded Wall Street expectations, with adjusted earnings per share reaching $2.48, surpassing the expected $2.21. Despite a decline in profit compared to the same period the previous year, Exxon declared a dividend of 95 cents per share for the first quarter, indicating confidence in its financial position. In 2023, the company returned a substantial $32.4 billion to shareholders through dividends and share buybacks.
- Challenges Due to Weakening Oil Prices: Exxon’s net income for the final quarter of 2023 was $7.63 billion, down 40% from the $12.75 billion reported for the same quarter in 2022. Weakening oil prices, influenced by a volatile market, a weakening Chinese economy, and record oil production in the U.S., contributed to this decline. The company’s profits from its oil and gas segment, energy products, and chemical products witnessed notable reductions during the quarter.
- Strategic Moves and Future Outlook: Exxon’s strategic decisions include a focus on shareholder returns, evident in the substantial amount returned in 2023 and an 8% increase in the quarterly dividend to $1.63. Despite market challenges, Exxon CEO Darren Woods highlighted the doubling of earnings power from 2019 to 2023 when market factors were excluded. The company invested in the Permian Basin, Guyana, and entered the lithium market, with lithium production expected to commence in 2027. Exxon’s agreement to acquire shale rival Pioneer Natural Resources for about $60 billion reflects its commitment to growth and strategic positioning in the oil and gas sector. The deal is anticipated to close in the first half of this year.
Exxon Mobil reported quarterly earnings that exceeded Wall Street’s expectations, despite a significant decline in profit compared to the same period the previous year due to weakening oil prices. The company declared a dividend of 95 cents per share for the first quarter, payable on March 11, contributing to the $32.4 billion returned to shareholders in 2023 through dividends and share buybacks. Exxon’s stock showed a modest increase in morning trading. In the fourth quarter, the company reported net income of $7.63 billion, or $1.91 per share, marking a 40% drop from the $12.75 billion, or $3.09 per share, profit in the same quarter of 2022. This decline was attributed to a $2 billion impairment charge in California related to regulatory issues. Adjusted earnings per share were $2.48, surpassing Wall Street’s expected $2.21 per share. For the full year 2023, Exxon booked a profit of $36 billion, down 35% from $55.7 billion the previous year, reflecting the volatile crude oil prices influenced by a weakening Chinese economy and record U.S. oil production.
Exxon CEO Darren Woods emphasized the company’s performance by highlighting a more than doubling of earnings power from 2019 to 2023 when excluding market factors. Despite reaching a closing stock high of $120.20 in 2023, Exxon’s shares ended the year 16% lower due to a pullback in crude oil prices. Profits from Exxon’s oil and gas segment in the fourth quarter declined to $4.1 billion, a 49% decrease from the $8.2 billion reported in the same period of the previous year. Energy product profits also fell to $3.2 billion, down 21% compared to the fourth quarter of 2022. Chemical product profits reached $189 million, down 24% from the year-ago period. Capital and exploration expenditures rose approximately 4% in the fourth quarter to $7.76 billion, reflecting investments in the Permian Basin, Guyana, and entry into the lithium market, with lithium production expected to commence in 2027. Exxon’s production remained largely flat at 3.73 million oil-equivalent barrels per day in 2023, with increases in the Permian Basin and Guyana offsetting declines elsewhere. The company anticipates net average production of 3.8 million barrels per day in 2024. Exxon’s acquisition of shale rival Pioneer Natural Resources for about $60 billion is expected to close in the first half of the year.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/02/exxon-xom-q4-earnings-report-2023.html
