ExxonMobil posts new record profit as oil prices remain high
America’s largest oil company ExxonMobil set a profit record for the second consecutive quarter as oil and gas prices remained high. The second American oil company Chevron also published results much better than expected.
ExxonMobil earned $18.7 billion, excluding special items, up 6% from record second-quarter results and up 177% from a year ago. Earnings per share of $4.45 beat the $3.79 forecast by analysts polled by Refinitiv.
Chevron (CVX), the nation’s second-largest oil company, also reported a huge increase in revenue that easily exceeded forecasts. Adjusted profit of $10.8 billion was nearly double the $5.7 billion made a year ago. But it was slightly lower than the $11.4 billion earned on that basis in the second quarter. Earnings per share of $5.56 easily beat the forecast of $4.81.
For the second quarter in a row, ExxonMobil did not mention that it had made a record profit, as companies usually do when they hit all-time highs. Reuters reported three months ago that the second quarter had been record earnings for both companies. Chevron also did not mention that it made a record profit in the prior period. With consumer outrage over high gas prices, the two companies likely wanted to avoid drawing attention to record profits.
ExxonMobil, however, reported record production for its refineries. Oil companies have faced calls from the Biden administration and Congress to increase supplies of gasoline and other petroleum products in the face of high prices and tight supplies caused by Russia’s invasion of Ukraine.
Oil companies have generally been slow to increase crude oil production, preferring to take their windfall profits and return them to shareholders through share buybacks and dividends to support their stock prices.
ExxonMobil said it paid out $11.2 billion in dividends and repurchased $10.5 billion of its stock this year, as part of its $30 billion buyback plan by the end of next year . During that time, it spent just $15.2 billion on exploration and capital expenditures.
But oil companies have been keen to move as much oil as possible through their refineries, given high retail prices and refining margins. Much of the additional oil comes from the release of around 1 million barrels of oil per day from the Strategic Petroleum Reserve, the country’s emergency oil stockpile.
U.S. retail gasoline prices actually fell for most of the quarter after hitting a record high of $5.02 on June 14, just before the start of the quarter. This was mainly due to growing concern among oil traders that the US and global economy could soon slide into recession, reducing travel and demand for gas and other commodities. Even with gas prices falling for much of the quarter, they remained well above year-ago levels, as well as the price prior to Russia’s invasion of Ukraine.
ExxonMobil shares rose 76% and Chevron shares rose 56%. Both were up another 2% in premarket trading on better-than-expected results.