ExxonMobil earns $6.8 billion in Q3, highest profit since Q4, 2017
In response to rising global economic activity, ExxonMobil Corp announced it would revive its long-dormant share repurchase program next year.
America’s largest oil and gas company reported a third-quarter net income of $6.8 billion, or $1.57 per share, the company’s best result since the last quarter of 2017. Comparatively, the company had lost $680 million, or 15 cents per share, a year earlier.
The company earned $1.58 a share, beating the Refinitiv estimate by two cents. With natural gas prices soaring and energy shortages pushing oil to a three-year high, third-quarter results were the best for refining in at least two years. The price of crude oil continues to climb toward a seven-year high.
As some analysts expressed disappointment in the size of the buyback program, Exxon shares closed up 16 cents at $64.49 on Friday. As the global economy emerges from the Coronavirus pandemic, the company’s three businesses have delivered higher returns as a result of past cost-cutting restructurings.
In a conference call with analysts, ExxonMobil CEO, Darren Woods said those changes are “seeming to pay off,” adding that Exxon plans to achieve $30 billion in annual profit by 2025 by making the same changes.
In 2016, Exxon cut its share repurchase program amid weak results, saying it would buy shares only in order to offset dilution due to executive pay plans instead of returning cash to shareholders.
During the decade prior, Exxon spent more than any other U.S. company on its own stock, at $210 billion.
Exxon announced it would increase its spending to cut its carbon emissions to $15 billion between 2022 and 2027, just a day after Woods testified before Congress about the company’s dismissal of global warming.
Despite a year-ago loss of $383 million, oil and gas profits soared to nearly $4 billion in the third quarter on strong international demand. Despite a drop from last quarter’s record high, chemical profits tripled compared to the same period last year.
As earnings rebounded from last year’s historic loss, Exxon shares are up more than 50% this year but remain below where they traded in early 2020. As a result of this year’s profits, the company has been able to repay about $11 billion of debt taken on last year to cover its dividend.