Exxon Mobil Corporation
CEO : Mr. Darren W. Woods
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | 14.6% YoY | 101.2% | 48.6% | 2023-01-31 |
Darren Woods says,
2022 Financial Results
- Industry-leading earnings of nearly $56 billion with a 400-basis point improvement in profit margin
- Delivered higher profits than 2012, our previous record year
- Industry-leading total shareholder return of 87% and a return on capital employed of 25%
- Cash flow from operating activities was nearly $77 billion, also leading the industry
Organizational Changes and Strategic Priorities
- Combined downstream and chemical companies to form Product Solutions, the world’s largest fuels, chemicals, and lubricants business
- Increased production from high-return, advantaged assets in Guyana and the Permian
- Expanded Low Carbon Solutions business, recently signing the first-of-its kind customer contract to capture and permanently store up to 2 million metric tons per year of CO2
- Invested approximately $17 billion in lower-emission opportunities from 2022 through 2027, up from $15 billion in our prior plan
- Made significant progress reducing greenhouse gas emissions in our existing operations and remain on track with our 2030 emissions reduction plans, including net-zero Scope 1 and 2 emissions for our unconventional operations in the Permian Basin by 2030
Capital Allocation Priorities
- Investing in advantaged projects
- Maintaining a strong balance sheet to manage across the commodity cycles
- Sharing success through shareholder distributions with a reliable and growing dividend
- Share repurchase program with up to $35 billion in cumulative repurchases in 2023 and 2024
2023 Financial Plan
- Anticipate 2023 capital and exploration expenses of $23 billion to $25 billion
- Expect to deliver another $2 billion in structural cost reductions, meeting our target of $9 billion in savings versus 2019
- Continue to progress our blue hydrogen project in Baytown, that consists of a billion cubic foot per day blue hydrogen plant, the world’s largest, and a CCS project with potential to store up to 10 million metric tons of CO2 per year
- Look to capture additional organizational synergies by consolidating our supply chain activities and centralizing a majority of our finance and procurement operations
Kathryn Mikells says,
Financial Impacts
- Incremental taxes in Italy and the UK resulted in $1.8 billion identified items.
- Cash impact will occur in 2023 and 2024, depending on individual countries.
EU Energy Policy
- EU policy penalizes the broad energy sector and does not encourage supply.
- US Inflation Reduction Act incentivizes industry to accelerate technology and decelerate investment in nascent industries like hydrogen and CCS.
- Investment is expected to flow into these industries.
Q & A sessions,
CapEx
- XOM is expected to be at the upper end of their given CapEx range for Q4 2022, which is slightly increased due to their progress in investments.
- The broader CapEx range they have given over the years fits well with their plans and pacing established when coming out of the pandemic.
- Their projects organization is making efficiencies and maintaining the same level of productivity even with the pause that had to be taken due to the pandemic.
Inflation
- XOM has been able to offset inflation year-on-year, mitigating the impact on their operating expenses through synergies and purchasing power advantages.
- Supply and demand in certain areas of the business, such as the Permian, puts pressure on pricing, but XOM is using the size of their business and long-term commitments to keep that in check.
Permian Development
- XOM plans to reach 1 million barrels a day of production by 2027, which is on track with their plan established in 2018.
- This year, they added 90,000 barrels a day of production, and they plan to add a similar number next year while rebuilding their DUC inventory.
- Their growth will not be steady every year, fluctuating by plus or minus 5%, and their success will depend on ongoing technology and operational improvements.
Chemical Business
- XOM expects demand to pick back up again as China’s economy continues to open up, but the supply side has a large number of chemical projects coming online at the same time.
- It will take time for the demand to fill that capacity, but the markets will get tight again, and XOM is thinking about their Chemical business with this market cycle in mind.
Competitive Positioning
- XOM’s focus on making sure their projects are advantaged versus the industry and on the left-hand side of the cost of supply curve has led to lower cost barrels, and they have been able to effectively produce barrels even when others have leaned out.
- Their philosophy has resulted in an improvement in net profit margins from 10% in 2012 to 14% in 2022.
No bad stock 