Exxon Mobil Corp XOM-N on Friday smashed expectations as soaring energy prices fueled a record-breaking quarterly profit, nearly matching that of tech giant Apple AAPL-Q.
Its $19.66-billion third-quarter net profit far exceeded recently raised Wall Street forecasts as skyrocketing natural gas and high oil prices put its earnings within reach of Apple’s $20.7-billion net for the same period.
As recently as 2013, Exxon ranked as the largest publicly traded U.S. company by market value – a position now held by Apple. Exxon shares jumped 2 per cent in premarket trading to $109.80, a new record high.
Oil company profits have soared this year as rising demand and an undersupplied energy market collided with Western sanctions against Russia over its invasion of Ukraine. U.S. exports of gas and oil to Europe have jumped and promise to set all-time profit records for the industry.
The top U.S. oil producer reported a per-share profit of $4.68, exceeding Wall Street’s $3.89 consensus view, on a huge jump in natural gas earnings, continued high oil prices and strong fuel sales.
“Our investments over the past five years, including through the lows of the pandemic, are really driving our results today,” Chief Financial Officer Kathryn Mikells told Reuters.
Exxon, which led record gains among oil majors in the prior quarter, last quarter pulled far ahead of Shell Plc and TotalEnergies SE with third-quarter profits almost twice as big. Its gains were aided by its highly criticized decision to double down on fossil fuels as competitors shifted to renewables.
Exxon banked $43-billion in the first nine months of this year, 19 per cent more than in the same period of 2008, when oil prices traded at a record level of $140 per barrel.
Earnings from pumping oil and gas tripled last quarter while profit from selling motor fuels jumped tenfold compared with year-ago levels. Natural gas sales to Europe and soaring demand for diesel fuel led the company’s better-than-expected results.
“The refining businesses – both in the U.S. and international – was the star performer,” said Peter McNally, an analyst at Third Bridge.
Those rising fuel profits have renewed calls by U.S. President Joe Biden for companies to invest the windfall from this year’s energy price runup in production rather than buy back their own shares.
Exxon will maintain its $30-billion share buyback through 2023 while increasing dividends, Mikells said. On Friday, it declared a fourth-quarter per share dividend of 91 cents, up 3 cents, and will pay $15-billion to shareholders this year.
Exxon said its U.S. oil and gas production from the Permian Basin was near 560,000 barrels of oil and gas per day (boed), a record.
Results also were helped by an almost 100,000-boed increase over the previous quarter in Guyana, where Exxon leads a consortium responsible for all output in the South American nation.
But output was hit by its withdrawal from Russia, where it abandoned more than $4-billion in assets and a 220,000-boed project following Moscow’s February invasion of Ukraine. Exxon said its assets were expropriated.
As a result, the company reduced its production forecast for the year by about 100,000 barrels per day.
“We are going to end up at about 3.7 million barrels a day for the full year,” Mikells said, down from a 3.8 million goal set in February.