Exxon Mobil has reported its fourth-quarter earnings for 2024, announcing adjusted profits of $7.39 billion, or $1.67 per share, which surpassed Wall Street's expectations of $1.56. Despite these encouraging figures, the U.S. oil giant revealed mixed results due to persistent challenges within its refining and chemicals sector.
On February 1, 2025, during the company’s earnings call, Exxon CEO Darren Woods outlined the results which highlighted increased production but underscored weaknesses within the refining business. The company’s earnings were supported by record production figures from the Permian Basin and significant output from lucrative projects in Guyana, which brought total production to 4.6 million barrels of oil equivalent per day, slightly up from the previous quarter’s 4.58 million.
The pressures resulting from lower overall oil prices and inhibiting refining margins have also been reflected across the oil sector, with Exxon’s competitors like Chevron and Shell grappling with similar difficulties. Exxon’s refining earnings saw a sharp drop, reporting just $323 million from gasoline and diesel production, significantly lower than the $3.2 billion recorded the previous year. Industry dynamics, including increased global fuel supply driven by new refineries opening worldwide, have contributed to this unfavorable business climate.
Woods pointed to the company’s strategic focus on spending efficiency, emphasizing they would pursue investments only if they met stringent return requirements. During the earnings call, he stated, "We’re not going to go ahead with them until we’re convinced the value is there." This cautious approach will guide decisions on future investments, including opportunities for low-carbon solutions.
Despite the challenges faced within the refining sector, the company’s upstream earnings – driven mainly by oil and gas production – surged to $6.28 billion, climbing sharply from $4.15 billion during the same quarter last year. The overall full-year earnings for Exxon fell to $33.46 billion from $38.57 billion, nevertheless marking it as the third-best year for financial performance within the last decade.
CFO Kathryn Mikells echoed concerns about the refining business's outlook, indicating, "That's really what we're watching as we look ahead to 2025." Analysts note the company’s favorable tax adjustments helped mitigate some losses and assisted in surpassing earnings expectations. Executives also confirmed the company had plans to increase project spending to boost oil and gas output by 18% by 2030 as part of their broader five-year strategy.
The cash flow from operations for 2024 was reported at $55 billion, with shareholder returns through buybacks and dividends amounting to $36 billion – the highest payout rates outside of just five companies within the S&P 500. Exxon plans substantial share repurchases amounting to $20 billion annually through 2026, showcasing their commitment to delivering value to shareholders. Woods noted, "Financially, we delivered some of our highest earnings and operating cash flow in a decade" which speaks to the overall performance attributed to strategic growth, even amid external market pressures.
Exxon’s strategy will continue to involve careful monitoring of the market and adjusting to new developments, including exploring opportunities contingent on regulatory changes, particularly concerning oil exploration areas. Despite mixed results, the company remains poised to capitalize on its production capabilities and maintain shareholder confidence with prudent financial management.