Exxon Mobil has recently announced its impressive third-quarter results, defying industry expectations as increased oil production compensated for shrinking refining margins and lower oil prices. The company's adjusted earnings rose to $1.92 per share for the September quarter, outpacing the consensus estimate of $1.89.
While total revenue and other income dipped to $90.02 billion compared to $90.76 billion last year, this still exceeded market forecasts of $88.36 billion. During the third quarter, oil prices fell by approximately $5 per barrel to $80, primarily due to uncertainties in supply and demand dynamics, as pointed out by Chief Financial Officer Kathy Mikells in her prepared remarks.
Additionally, refining margins experienced a decline as record global demand was effectively met by increased supply from new industry start-ups. "Despite these market headwinds, our diverse and integrated portfolio continues to deliver strong results," said Mikells. Natural gas prices showed improvement during the quarter, bolstered by summer demand from warmer weather in North America and European supply concerns. In premarket trading, Exxon’s shares demonstrated a 1.9% rise, reflecting investor confidence.
Earnings from the upstream segment rose slightly to $6.16 billion, up from $6.13 billion in the same quarter last year. Production figures increased significantly to 4.58 million oil-equivalent barrels per day from 3.69 million barrels, surpassing the analysts' prediction of 4.51 million barrels. Contrarily, earnings from the energy product operations segment fell sharply to $1.31 billion from $2.44 billion a year earlier, largely influenced by decreased refining margins and a tornado-related shutdown at its Illinois refinery.
The chemical products division, however, saw earnings surge to $893 million, a significant jump from $249 million in the previous year, and specialty products also advanced to $794 million from $619 million. The total costs and deductions experienced a slight decline, falling to $76.99 billion from $77.06 billion in the corresponding period last year.
Since 2019, the company has realized $11.3 billion in structural cost savings, as stated by Chief Executive Darren Woods. Capital and exploration expenditures stood at $7.16 billion compared to $7.04 billion the previous year, aligning with Exxon's full-year target of $28 billion. Looking ahead, scheduled maintenance in the upstream is anticipated to reduce volumes by 30,000 oil-equivalent barrels per day in the fourth quarter, according to Mikells.
Exxon maintained its full-year production target of 4.3 million oil-equivalent barrels per day, which includes Permian production of 1.2 million oil-equivalent barrels daily..