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ExxonMobil (XOM) Q4 Earnings and Revenues Beat Estimates

·5 min read

Exxon Mobil Corporation’s XOM fourth-quarter 2021 earnings per share of $2.05 — excluding identified items — beat the Zacks Consensus Estimate of $1.96 per share and improved from the year-ago profit of 3 cents.

Total revenues of $84,965 million beat the Zacks Consensus Estimate of $82,442 million and jumped from the year-earlier figure of $46,540 million.

The strong quarterly results were owing to improved realized oil and natural gas prices as well as higher refining and chemical margins. The results reflect a significant recovery in fuel demand compared to last year, thanks to the rolling out of coronavirus vaccines at a massive scale.

Although ExxonMobil reported strong results, Chevron Corporation CVX, another integrated energy major, however, missed the Zacks Consensus Estimate for earnings in the fourth quarter. Chevron’s underperformance can be blamed on weaker-than-expected performance by both segments.

Some good news for investors is that Chevron raised its quarterly dividend by 6% to $1.42 per share (or $5.68 per share annualized).

Initiates Share Repurchase

ExxonMobil has initiated share repurchases at the beginning of the March quarter of this year. The buybacks are associated with the repurchase plan announced earlier, representing the program of repurchasing up to $10 billion over the next 12 to 24 months.

Operational Performance

Upstream

The segment of ExxonMobil reported quarterly earnings of $6,085 million against a loss of $18,532 million in the year-ago comparable quarter. This upside was primarily driven by higher commodity prices and oil-equivalent production volumes.

Operations in the United States recorded a profit of $1,768 million against a loss of $16,803 million in the December quarter of 2020. The company reported profits of $4,317 million from non-U.S. operations, which turned around from a loss of $1,729 million in the year-ago quarter.

Production: ExxonMobil’s total production averaged 3,816 thousand barrels of oil equivalent per day (MBoe/d), higher than 3,689 MBoe/d a year ago, reflecting the recovery in fuel demand.

Liquid production increased to 2,385 thousand barrels per day (MBbls/d) from 2,325 MBbls/d in the prior-year quarter. The outperformance was owing to higher production, primarily in the United States and Asia. Natural gas production was 8,584 million cubic feet per day (Mmcf/d), up from 8,185 Mmcf/d a year ago due to higher output from the United States and Asia.

Price Realization: In the United States, ExxonMobil recorded crude price realization of $73.62 per barrel, significantly higher than the year-ago quarter’s $39.06. The same metric for non-U.S. operations rose to $69.97 per barrel from the year-ago $37.86.

Natural gas prices in the United States were recorded at $4.96 per thousand cubic feet (Mcf), higher than the year-ago quarter’s $2.20. Also, in the non-U.S. section, the metric improved to $14.32 per Mcf from $4.85 in fourth-quarter 2020.

Downstream

The segment of ExxonMobil recorded a profit of $1,467 million against a loss of $1,211 million a year ago due to improved refining margins from the United States and non-U.S. operations.

ExxonMobil's refinery throughput averaged 4,118 MBbls/d, higher than the year-earlier level of 3,755 MBbls/d. Petroleum product sales rose to 5,391 MBbls/d from 4,833 MBbls/d a year ago.

Chemical

This unit of ExxonMobil recorded a $1,921-million profit, skyrocketing from earnings of $691 million in the year-ago quarter on significantly higher margins from U.S. and non-U.S. operations. Prime product sales rose to 6,701 thousand metric tons (kt) from 6,643 kt a year ago.

Financials

During the quarter under review, ExxonMobil generated cash flow of $19,725 million from operations and asset divestments. The company's capital and exploration spending increased 21.7% year over year to $5,808 million.

At the end of fourth-quarter 2021, ExxonMobil’s total cash and cash equivalents were $6.8 billion and debt amounted to $47.7 billion.

Guidance

ExxonMobil projects capital spending for 2022 in the band of $21 billion to $24 billion.

Zacks Rank & Other Stock to Consider

ExxonMobil sports a Zacks Rank #1 (Strong Buy). Other players in the energy space that warrant a look include Murphy USA Inc. MUSA and APA Corporation APA. While Murphy USA sports a Zacks Rank #1, APA Corporation carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Murphy USA is well-positioned to gain from improving gasoline demand in the coming months since it is a prominent retailer of gasoline and convenience merchandise. With a network of retail gasoline and convenience stores in 27 states, Murphy USA serves an estimated two million customers every day.

In the past 30 days, Murphy USA has witnessed upward earnings estimate revisions for 2022.

APA Corporation is well poised to gain from the latest spike in crude oil and natural gas prices, banking on its exploration and production activities in the United States, Egypt and the U.K.

In the past seven days, APA Corporation has witnessed upward earnings estimate revisions for 2022. The Zacks Consensus Estimate for APA Corporation’s 2022 earnings of $6.40 per share suggests year-over-year improvement of more than 59%.


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