ExxonMobil Posts Four-Year High Quarterly Profit, But Misses Analyst Estimates

ExxonMobil on Friday reported its biggest quarterly profit in four years, buoyed by surging oil prices and strong refining margins. However, the company's adjusted earnings fell short of analyst consensus estimates, according to a report from Reuters.

Earnings in Detail

For the second quarter, the U.S. oil giant posted adjusted earnings of $14.7 billion, or $3.52 per share. This represented a 67% increase from the first quarter and more than double the profit from the same period last year. Despite the strong performance, the result missed the consensus analyst estimate of $3.60 per share compiled by LSEG.

Exxon Chief Financial Officer Neil Hansen attributed the miss to "extreme swings" in commodity prices and margins that were challenging to model accurately. The results stand in contrast to U.S. competitor Chevron and European peer Shell, both of which beat analyst estimates for the quarter.

Production and Market Headwinds

The strong earnings were underpinned by a sharp rise in energy prices, with benchmark Brent crude averaging $96.68 per barrel in the second quarter, a 23% increase from the prior quarter. The source material attributes this to geopolitical uncertainty, including tensions impacting shipping through the Strait of Hormuz.

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Exxon’s total production for the quarter was 4.5 million barrels of oil equivalent per day (boepd), down slightly from 4.6 million boepd in the first quarter. Key production impacts included:

• A loss of 450,000 barrels per day related to its liquefied natural gas (LNG) operations in Qatar.
• An additional 150,000 bpd offline from an oilfield in the United Arab Emirates.
• These losses were partially offset by record production of more than 1.8 million bpd from the Permian Basin in the United States.

Capital Returns and Balance Sheet

Exxon continued its robust shareholder return program, paying $4.3 billion in dividends and repurchasing $5.1 billion of its own stock during the quarter. The company remains on track to meet its goal of buying back $20 billion in shares this year.

CFO Neil Hansen noted that the company is focused on strengthening its financial position, having reduced its net debt by $7 billion in the second quarter. He added that further improvements to the balance sheet are a priority before increasing dividends and buybacks.