[Editor’s note: This story was updated at 10:05 a.m. CST Feb. 1.]
Exxon Mobil Corp. (NYSE: XOM) on Feb. 1 reported a quarterly profit that topped analysts’ estimates, pushing it shares up nearly 3% in premarket trading as its oil and natural gas output rose slightly on a year-over-year basis.
The company's fourth-quarter net income fell to $6 billion, or $1.41 a share, from $8.38 billion a year ago. But earnings excluding the impacts of tax reform and impairments rose to $6.4 billion from $3.73 billion a year ago.
Analysts had forecast a $1.08 a share profit excluding one-time items, according to data from Refinitiv. Exxon Mobil’s oil-equivalent production rose to just over 4 million barrels per day (bbl/d), up from 3.9 million bbl/d in the same period the year prior. The company said its output in the Permian Basin, the largest U.S. shale basin, rose 90% over a year ago.
RELATED: Exxon Mobil Planning To Double Profit By Combining Exploration Units
Results for oil and gas production were “especially strong,” said Brian Youngberg, an analyst with Edward Jones. “It was a good quarter to end the year. I think the focus now will be on improving the cash flow.”
Exxon Mobil is not planning share buybacks this quarter, though, which makes it the only international oil company “not currently repurchasing shares,” analysts with Simmons Energy said in a client note.
The company now expects to spend $30 billion this year, up from about $28 billion it had forecast previously, and analysts at J.P. Morgan said in a client note that the higher spending “takes away from the ‘sizzle’ of the quarter.”
CEO Darren Woods said Exxon Mobil would sanction LNG projects on the U.S. Gulf Coast and in Mozambique this year. Qatar Petroleum and Exxon are expected to announce plans next week to proceed with the $10 billion Golden Pass LNG Terminal export project in Texas.
Pretax earnings in its refining business were $2.7 billion, up $1.7 billion over the same period the year prior.
Exxon earned $1.1 billion more pretax in its upstream business than it did in the fourth quarter of 2017, and said higher natural gas prices were partially offset by lower liquids pricing.
Pretax profits in Exxon Mobil’s chemicals business were down $191 million on weaker margins, growth-related expenses and higher downtime and maintenance.
Woods credited better-than-expected results to the company optimizing its operations across the board and said it has an advantage because of its ability to tie decisions in the oil field to logistics and refining.
“Irrespective of where we are in the cycle, we’re going to be advantaged versus the rest of industry,” he said. Woods joined a conference call with analysts this morning for the first time since becoming CEO two years ago.
Production declines have been a significant issue in previous quarters for Exxon and it is a “positive sign” that production improved in the fourth quarter, said Muhammed Ghulam, analyst with Raymond James. But he noted the earnings beat was “partially driven by one-time asset sale gains of more than $800 million” from a refinery sale.
RELATED: Exxon Mobil Addresses License To Operate Amidst Permian Basin Growth
Shares were up 4% to $76.28 on Feb. 1. Shares are down about 11% in the last year. Exxon Mobil is a component of the Dow Jones Industrial Average.
Recommended Reading
Shell Offshore Takes FID on Waterflood Project in GoM
2024-08-14 - Shell Offshore’s waterflood secondary recovery process involves injecting water into the reservoir formation to extract oil.
Gran Tierra Makes Oil Discovery in Ecuador’s Charapa Block
2024-08-12 - Gran Tierra Energy’s oil discovery at the Charapa-B6 well will be its fifth discovery in Ecuador.
TGS to License Tanzania’s Offshore Subsurface Data
2024-06-20 - TGS, in an agreement with Tanzania’s Petroleum Upstream Regulatory Authority, reserves the right to license all of the country’s offshore data, acquire future seismic data and reprocess existing data.
E&P Highlights: Aug. 19, 2024
2024-08-19 - Here’s a roundup of the latest E&P headlines including new seismic solutions being deployed and space exploration intersecting with oil and gas.
As Oil Production Scales the Heights, Texas E&P Jobs Disappear —TXOGA
2024-08-06 - As operational efficiencies give E&Ps the ability to produce more oil with fewer rigs, Texas employment in the oil patch has fallen five out of the first six months of 2024.