by Sabrina Valle
(Reuters) – Exxon Mobil beat expectations on Friday as soaring energy prices helped it post a record quarterly profit nearly equaling that of tech giant Apple.
Its net profit of $19.66 billion (19.78 billion euros) for the third quarter far exceeded recent Wall Street forecasts, as soaring natural gas and oil prices brought its gains closer to those realized by Apple ($20.7 billion) over the same period.
In 2013, Exxon was still the largest publicly traded US company by valuation, a position now occupied by Apple.
Profits for oil groups have soared this year as rising demand and an undersupplied energy market come up against Western sanctions on Russia over its invasion of Ukraine. US gas and oil exports to Europe have surged and point to record profits for the industry.
The top US oil producer posted earnings per share of $4.68, beating the Wall Street consensus of $3.89, helped by a huge jump in natural gas revenues, continued high oil prices and strong fuel sales.
In the previous quarter, Exxon made the biggest profits among the five oil majors. In the third quarter, the group far outpaced its counterparts Shell and TotalEnergies, with profits almost twice as big, boosted by its controversial decision to double the share of fossil fuels as its European competitors turned to renewables.
“Our investments over the past five years, especially during the pandemic lows, are really driving our results today,” Exxon chief financial officer Kathryn Mikells told Reuters.
The group made $43 billion in the first nine months of this year, up 19% from the same period in 2008, when oil prices hit record highs of $140 a barrel.
The company spent $5.73 billion on new oil and gas projects in the last quarter, 24% more than last year, Kathryn Mikells said, adding the group is on track to meet its investment target of 21 to 24 billion dollars in 2022.
Rising profits have revived US President Joe Biden’s calls for oil companies to invest windfall profits generated by soaring energy prices this year in production rather than buying back their own shares.
Exxon will continue its $30 billion share buyback program through 2023 while increasing dividends, its chief financial officer said. The company also on Friday announced a fourth-quarter dividend of 91 cents a share, up 3 cents, and paying out $15 billion to shareholders this year.
Exxon stock hit an intraday high of $109.58 this week as the price of oil rose above $96 a barrel.
In the third quarter, the price of US natural gas averaged $7.95 per million British thermal units (mmBtu), up 10% from the previous quarter. Brent prices fell to $98 a barrel over the same period, from an April-June average of $109.
Exxon said its oil and gas production in the Permian Basin is about 560,000 barrels of oil equivalent per day (boe/d), a record high. This figure represents an increase of 11%, or 50,000 barrels per day, year-on-year.
Its results were boosted by an increase of nearly 100,000 barrels of oil equivalent from the previous quarter in Guyana, where Exxon leads a consortium responsible for all production in the South American country.
Production was hit, however, by the group’s withdrawal from Russia, where it abandoned more than $4 billion in assets and a 220,000-barrel project following Moscow’s invasion of Ukraine. Exxon said its assets had been expropriated.
The company has thus reduced its production forecast for the year by around 100,000 barrels per day.
“We’re going to finish at around 3.7 million barrels per day for the full year,” the chief financial officer said, down from the 3.8 million target set in February.
(Report Sabrina Valle; French version Dagmarah Mackos, edited by Kate Entringer)
Copyright © 2022 Thomson Reuters