Energy Economy

29 Oct 2022

Exxon's Third-Quarter Record Profit Surges on Higher Energy Prices

29 Oct 2022  by   

Exxon's third-quarter earnings almost matched technology giant Apple’s $20.7 billion net profit in the same period. Reuters

US energy giant Exxon Mobil, one of the world's biggest companies, exceeded analysts' expectations to post a record-breaking third-quarter profit, which surged 191 per cent to $19.66 billion on the back of higher energy prices and an increase in demand.

The Texas-based company’s earnings for the three months to September 30 almost matched that of technology giant Apple’s $20.7bn net profit for the same period.

record $17.9bn it reported for the previous quarter

“Our strong third-quarter results reflect the hard work of our people to invest in and build businesses critical to meeting the demand we see today,” Darren Woods, chairman and chief executive of Exxon, said in a statement on Friday.

“We all understand how important our role is in producing the energy and products the world needs, and third-quarter results reflect our commitment to that objective.”

Exxon’s profit increased due to surging demand and poor supply in energy markets that have been exacerbated by western sanctions imposed against Russia over its invasion of Ukraine.

The company's third-quarter results included “net favourable identified items of nearly $1bn associated with the completion of the XTO Energy Canada and Romania Upstream affiliate divestments and one-time benefits from tax and other reserve adjustments”, Exxon said in a statement on Friday.

The completion of the sale of XTO Energy Canada and the Romania Upstream affiliate, resulted in earnings of $600 million and more than $2bn in cash proceeds during the quarter.

The company’s capital and exploration expenditures totalled $5.7bn in the July to September period, bringing its year-to-date investments to $15.2bn.

Its cash reserves increased by $11.6bn in the third quarter, with free cash flow of $22bn. Shareholder distributions were $8.2bn for the quarter, including $3.7bn for dividends and $4.5bn of share repurchases.

Exxon plans to repurchase up to $30bn of shares through 2023.

FILE PHOTO: Darren Woods, Chairman & CEO of Exxon Mobil Corporation attends a news conference at the New York Stock Exchange (NYSE) in New York, U.S., March 1, 2017. REUTERS/Brendan McDermid/File Photo
Darren Woods, chairman and chief executive of Exxon. Reuters
“The investments we have made, even through the pandemic, enabled us to increase production to address the needs of consumers. Rigorous cost control and growth of higher-margin petroleum and chemical products also contributed to earnings and cash flow growth in the quarter,” Mr Woods said.

As part of its net-zero goals, Exxon and CF Industries — a global manufacturer of hydrogen and nitrogen products — have joined forces to capture and permanently store up to two million metric tonnes of carbon dioxide emissions annually from CF Industries' manufacturing complex in Louisiana.

The project, which is scheduled to start in 2025, supports Louisiana’s objective of net-zero carbon emissions by 2050.

“We are expanding our low carbon solutions business with the signing of the largest-of-its-kind customer contract to capture and permanently store carbon dioxide, demonstrating our ability to offer competitive emission-reduction services to large industrial customers around the world,” Mr Woods said.


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