Exxon Mobil Corporation (NYSE:XOM) has revealed its financial results for the fourth quarter of 2024, showing both promising and concerning figures. With total revenues reported at $83.4 billion, the company fell short of analysts' expectations, which had set the bar at $86.6 billion. Similarly, net production increased slightly to 4.6 million oil-equivalent barrels per day but did not fully translate to financial success as adjusted net profit dipped to $7.39 billion, compared to $8.61 billion from the previous quarter.
The adjusted earnings per share (EPS) figure of $1.67 did, nonetheless, beat consensus estimates of $1.56, showcasing the company’s ability to manage costs effectively amid fluctuering market conditions. This positive performance highlights Exxon’s operational efficiency, particularly through high-margin projects within the profitable regions of Permian Basin and Guyana.
Darren Woods, Chairman and CEO of Exxon Mobil, emphasized the company’s strong earnings performance, stating, "Financially, we delivered some of our highest earnings and operating cash flow in a decade. We earned returns higher than our peers and well above our cost of capital, and we distributed more cash to shareholders than all but five companies in the entire S&P 500." His comments reflect confidence and highlight the company’s commitment to shareholder returns.
Exxon Mobil’s capital and exploration expenditures amounted to $7.51 billion in the fourth quarter, bringing the year-long total to $27.6 billion. The company has achieved structural cost savings of $12.1 billion since 2019, including $2.4 billion acquired during the year. Woods remarked on the company’s focus on maintaining these savings, stating, "We expect to deliver cumulative savings of $18 billion through the end of 2030 versus 2019." This projection demonstrates Exxon’s strategic focus on cost-efficient operations as it navigates potential economic challenges.
Shareholder returns for 2024, totaling $36.0 billion, comprised of $16.7 billion in dividends and $19.3 billion through share repurchases, underline Exxon Mobil's strategy to reward its investors. The company plans to expand its $20 billion annual share repurchase program through 2026, offering steady reassurance to shareholders and potential investors alike.
Despite the general struggle seen across the energy sector, where fluctuated oil prices remain a predominant concern, Exxon’s diverse production and strategic operations have bolstered its standing within the industry. According to analysts, the market's immediate price movement according to these results will heavily depend on management's forward-looking statements made during the earnings call. The current consensus EPS for the next quarter stands at $1.80 on $86.28 billion revenues anticipated.
Exxon shares initially reacted positively, trading up by 0.91% prior to market opening at $110.57. This reflects cautious optimism, as traders weigh the earnings report against broader market trends. Nonetheless, year-to-date, Exxon's shares have underperformed relative to the S&P 500, which is experiencing higher gains.
Looking forward, Exxon Mobil maintains optimism about its operational strategies and potential for improving profitability, particularly through increased output from its prime exploration areas. Analysts remain divided on the stock’s outlook, with changes to earnings expectations central to any anticipated movement. The uncertainty highlights the importance of tracking the $1.80 EPS estimate and its revisions, indicating the market's sentiment on Exxon’s capacity for sustained growth.
Woods concludes with forward-looking aspirations for the company: "Our unique investment opportunities give us profitable growth well beyond 2024 and well past 2030, underpinned by our financial strength and ability to return significant cash to shareholders." This declaration signifies Exxon’s commitment to enhancing value for its stakeholders amid the unpredictability of the energy market.