HOUSTON, Oct. 28 (Reuters) – ExxonMobil (XOM.N) Friday smashed expectations as rising energy prices drove record quarterly profits, nearly matching those of tech giant Apple.
Its third-quarter net profit of $19.66 billion exceeded expectations from Wall Street, which recently raised its forecasts as rising natural gas and oil prices put its profits within reach of Apple. (AAPL.O) $20.7 billion net for the same period.
As recently as 2013, Exxon ranked as the largest publicly listed US company by market capitalization – a position now held by Apple. Exxon shares rose 3% to $110.70, a record market capitalization of $461 billion.
Oil companies’ profits have soared this year as rising demand and an under-supplied energy market collide with Western sanctions against Russia over its invasion of Ukraine. US exports of gas and oil to Europe have soared, promising record-breaking profits for the industry.
The largest US oil producer posted earnings per share of $4.68, beating Wall Street expectations of $3.89, on the back of a massive jump in natural gas earnings, continued high oil prices and strong fuel sales.
“Where others have retreated in the face of uncertainty and historical slowdown, and retreat and decline, this company has moved forward, and it has kept investing,” CEO Darren Woods told investors. He added that its quarterly earnings “reflect this deep commitment” as well as higher prices.
Exxon led record gains among oil majors in the second quarter and jumped over Shell (coincidence) and TotalEnergies SE (TTEF.PA) With profits nearly two times greater than the ongoing bets on fossil fuels as competitors have shifted investment to renewables.
Exxon raised $43 billion in the first nine months of this year, up 19% from the same period in 2008, when oil prices were trading at a record $140 a barrel.
Profits from pumping oil and gas tripled in the last quarter, while profits from selling motor fuels jumped tenfold compared to last year’s levels. Sales of natural gas to Europe and increased demand for diesel fuel led the company to better-than-expected results.
“The refining business – both in the US and internationally – has been the stellar performer,” said Peter McNally, analyst at Third Bridge.
Soaring fuel earnings have renewed calls by US President Joe Biden for companies to invest the windfall from this year’s high energy prices in production rather than buy back their shares.
Kathryn Michaels, Reuters’ chief financial officer, said Exxon will maintain its $30 billion share buyback through 2023 while increasing its dividend. On Friday, it announced a fourth-quarter dividend of 91 cents, up 3 cents, and will pay $15 billion to shareholders this year.
Exxon said its US oil and gas production from the Permian Basin was approaching 560,000 barrels of oil and gas per day, a record. CEO Woods said production for this year will rise by about 20% through 2021.
“We are improving and adjusting our development plans,” he told analysts, with full-year production increasing well below the 25% increase that Exxon forecast in February.
The results were also supported by an increase of nearly 100,000 barrels per day compared to the previous quarter in Guyana, where Exxon leads a consortium responsible for all production in the South American country.
But its withdrawal from Russia lowered its overall production forecast for the year by about 100,000 barrels per day. Exxon said its Russian assets were confiscated.
“We will finish at about 3.7 million bpd for the whole year,” Michaels said, down from the 3.8 million bpd target set in February.
(Reporting by Sabrina Valley) Editing by Ana Nicolasi da Costa, Jonathan Otis and Margarita Choi
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