ExxonMobil gains following record profit, 'solid execution'

January 31, 2023 8:32 AM EST
(Updated - January 31, 2023 10:37 AM EST)

By Geoffrey Smith

After starting the day lower following its fourth-quarter earnings, ExxonMobil (NYSE: XOM) shares gained momentum as trading continued after posting one of corporate America's biggest-ever annual profits. Shares last traded up 1.7%.

The oil and gas group said it made $12.8 billion in the final quarter of the year, bringing total profit for 2022 to $55.7 billion.

Adjusted EPS for the quarter was $3.40, above the consensus forecast of $3.29. Upstream earnings were modestly higher while Energy Products earnings were slightly below, Mizuho analysts noted.

Meanwhile, total revenue in the quarter was $95.429 billion, up 12% from last year but below the consensus of $97.17 billion. For the year, revenue surged 45% to $413.68 billion.

Exxon said it expects to pay another $400 million in taxes in Europe in the coming quarter, on top of $1.8 billion paid in the last quarter.

It also said that it expects its daily output in the current quarter to be in line with the 3.8 million barrels of oil equivalent posted in the final quarter of 2022, with growth in its Permian basin projects offsetting asset disposals elsewhere.

"Of course, our results clearly benefited from a favorable market but, to take full advantage of the undersupplied market our work began years ago," Chief Executive Darren Woods said in a presentation accompanying the release. He implied that 2022's results were the results of the investments that drove Exxon to its first loss in decades in 2020 - investments that are now paying off.

"We leaned in when others leaned out, bucking conventional wisdom. We continued with these investments through the pandemic and into today," Woods said.

Mizuho analyst Nitin Kumar said the one thing lacking from the earnings release was a "splashy buyback announcement."

"Although XOM announced a 1Q23 dividend of $0.91/sh (~3% higher q/q), there was no increased buyback," Kumar commented. "However, management reiterated its commitment to repurchase up to $35bn of shares between 2023-24. With over $100bn on potential FCF by 2027 and $29.8bn of cash returns in 2022 (split 50-50 between dividends on buybacks), we expect continued execution on the cash return plan."

Overall, the analyst said the results "point to solid execution of its strategy."

Exxon's stock price fell to its lowest in nearly 20 years during the pandemic as mobility restrictions around the world crushed demand for oil. However, as economies have reopened, so oil prices have rebounded, and many analysts expect the market to remain well-supported this year as Chinese tourists and businessmen travel freely for the first time in three years. Exxon's stock price, meanwhile, has nearly quadrupled from its low in November 2020.

You May Also Be Interested In

Related Categories

Earnings, Hot List

Related Entities