By Sabrina Vallee
HOUSTON (Reuters) – Exxon Mobil Corp defied expectations on Friday as rising energy prices fueled a record quarterly profit that nearly matched that of tech giant Apple.
Its $19.66 billion third-quarter net profit recently topped Wall Street forecasts as skyrocketing natural gas and higher oil prices pushed Apple’s net income to $20.7 billion.
As recently as 2013, Exxon ranked as the largest publicly traded U.S. company by market capitalization—a position now held by Apple.
Oil company profits have soared this year due to increased demand and an undersupplied energy market, along with Western sanctions against Russia’s aggression against Ukraine. US exports of gas and oil to Europe have jumped, promising to set all-time profit records for the industry.
America’s top oil producer earned $4.68 a share, beating Wall Street’s consensus view of $3.89, thanks to a big jump in natural gas revenue, continued high oil prices and strong fuel sales.
Exxon, which led the record gains of the five so-called oil majors in the previous quarter, fared better than Shell and Total Energies with third-quarter profits nearly twice as big. Its gains were helped by its much-criticized decision to double down on fossil fuels as European rivals shifted to renewables.
“Our investments over the past five years, including the decline in the pandemic, are driving our results today,” Chief Financial Officer Kathryn Michaels told Reuters.
GRAPHIC – Exxon Reports Record-Breaking Third-Quarter Results
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Exxon earned $43 billion in the first nine months of this year, up 19% from the same period in 2008, when oil prices traded at a record high of $140 a barrel.
The company spent $5.73 billion on new oil and gas projects last quarter, up 24% from a year ago, and is on track to meet its investment target of $21 billion to $24 billion this year, he said.
Rising profits have renewed calls from US President Joe Biden for companies to invest windfall gains from this year’s energy price run-up in manufacturing instead of buying back their own stock.
Michaels said Exxon will maintain its $30 billion share buyback program through 2023 while increasing the dividend. On Friday, it announced a fourth-quarter dividend of 91 cents per share, up 3 cents, and will pay out $15 billion to shareholders this year.
Investors pushed Exxon shares to a record high of $109.58 this week as oil prices traded above $96 a barrel.
In the third quarter, U.S. natural gas prices averaged $7.95 million British thermal units (mmBtu), up 10% from the second quarter. Brent prices fell to $98 a barrel over the same period, from an average of $109 between April and June.
Exxon said its oil and gas production from the Permian Basin is 560,000 barrels of oil equivalent (bod) per day. That’s up 11%, or 50,000 barrels per day, from a year ago.
Results were helped by an increase of nearly 100,000 bpd from the previous quarter in Guyana, where Exxon leads the consortium responsible for all of the South American nation’s production.
But production was hit by its exit from Russia, where it shed more than $4 billion in assets, and a 220,000 baud project following Moscow’s invasion of Ukraine. Exxon said its assets were expropriated.
As a result, the company cut its production forecast for the year by about 100,000 barrels per day.
“We’re going to end up with about 3.7 million barrels a day for the full year,” Michaels said, up from the 3.8 million target set in February.
(Reporting by Sabrina Valle; Editing by Ana Nicolasi da Costa)
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