Wall Street analysts on Oct. 5 sharply increased their view of Exxon Mobil Corp.’s third-quarter earnings after the company disclosed a $2 billion profit gain from selling natural gas.

The disclosure signaled the largest U.S. oil maker quarterly profit due out later this month will land close to the second quarter’s record $17.9 billion profit, analysts said. The earnings revisions follow a securities filing that offered a snapshot of operating profits.

Exxon Mobil could earn about $4 per share, compared to the second quarter’s $4.21 per share profit, analysts wrote. The consensus was $3.44 per share, according to IBES Refinitiv.

Exxon Mobil shares jumped 4% to $99.09 on Oct. 5. The previous session they closed up 3.6%.

“Upstream was much stronger than expected, particularly on gas, while refining was worse than we had modeled,” said RBC director of European research Biraj Borkhataria.

Exxon Mobil’s profits from producing oil and gas last quarter “will surpass record 2Q22 earnings with an implied mid-point of $11.8 billion,” wrote analysts at Bank of America Securities. The results set up Exxon Mobil for its first “meaningful” dividend increase in three years, they added.

Gas prices have soared during the war in Ukraine as Europe scrambles to substitute Russian pipeline gas supplies that used to make up almost 40% of the continent's imports.

The Dutch TTF gas benchmark was trading about $47 per million British thermal units (MMBtu) this week and U.S. gas futures traded Oct. 5 about $6.90 per MMBtu.

On Oct. 4, Exxon Mobil said the approximately $2 billion increase in natural gas profits more than offset a quarterly decline of about $1.6 billion in oil profits.

Exxon Mobil and rivals this year have posted sky-high earnings on rising energy prices and demand aided by cost-cutting. Its results bode well for companies with sizeable gas businesses, including Chevron Corp., TotalEnergies SE and ConocoPhillips Co.

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