Exxon Mobil shares surge 336% on record gains fueled by ‘benign market’
Exxon Mobil (XOM) posted mixed financial results for the fourth quarter on Tuesday, beating earnings estimates but missing revenue outlook. Fueled by a “benign market,” the energy giant reported record profits in 2022 and its highest annual revenue since 2013. Shares of Exxon Mobil fell on Tuesday.
XOM Stock: Earnings
Assessments: Analysts had forecast earnings to rise 60% to $3.29 per share and were targeting a 15% advance in sales to $97.35 billion. For the full year, Wall Street is forecasting a 158% increase in EPS to $13.92. That would surpass the previous record of $8.47 in 2008. Revenue estimates call for a 50% jump to $425.94 billion.
Profits: Exxon Mobil reported EPS growth of 66% to $3.40, while revenue jumped 12% to $95.43. In 2022, Exxon Mobil’s earnings soared 160% to $14.06 per share. Sales rose 45% to $413.68 billion.
The energy giant’s free cash flow reached $62.1 billion in 2022, an increase of nearly $23 billion. Exxon Mobil returned a total of $29.8 billion to shareholders through dividends and buybacks. The company added that it will return up to $35 billion to shareholders in 2023.
Exxon Mobil CEO Darren Woods said in a statement on Tuesday that the company “clearly benefited from a favorable market” in 2022.
“Our 2023 plan calls for further progress on our strategic goals, which include industry leadership in safety, operational and financial performance,” Woods said.
The five-year plan
Exxon Mobil has already announced its five-year corporate plan in early Decemberannouncing that it expects to maintain its annual capital spending of $20 billion to $25 billion through 2027. The oil giant also plans to increase its share buyback program to $50 billion by 2024.
Investors will also monitor the company’s cash balance. Exxon reported $29.7 billion at the end of the fourth quarter after having $30.4 billion at the end of the third quarter, up nearly 350% from the $6.8 billion reported at the start of the year.
Along with maintaining the level of its annual capital spending through 2027, Exxon Mobil also plans to increase its investments to reduce carbon emissions to about $17 billion over the same period. This represents a nearly 15% increase from current levels. Exxon’s capital expenditures in 2023 will be in the range of $23 billion to $25 billion.
The company expects earnings and cash flow to double by 2027 compared to 2019. Full-year earnings in 2019 were $2.25 per share. Cash flow from operations in 2019 was $29.7 billion.
A ‘benign market’ in 2022 for oil and gas
In 2022, as the US economy was recovering from the Covid pandemic, Russia invaded Ukraine in February, causing oil, gasoline and natural gas prices to spike. This prompted Exxon Mobil and Chevron (CVX) and other energy shares of the head of the stock market, p companies with record profits.
Exxon Mobil has averaged a 225% EPS growth rate over the last three quarters. In the third quarter, Exxon Mobil and Chevron reported total net income of over $30 billion in the third quarter. Irving, Texas-based Exxon Mobil reported the strongest quarterly profit in its 152-year history.
On Friday, Chevron missed earnings reviews while beating revenue estimates. This followed an earlier announcement to launch a massive $75 billion share buyback and raise the dividend.
Throughout 2022, President Joe Biden criticized Exxon MobilChevron and several other major producers for choosing to focus on returning cash to shareholders instead of spending to increase production.
Late Friday, White House Assistant Press Secretary Abdullah Hassan tweeted that “companies clearly have what it takes — record profits and thousands of approved permits — to ramp up production.”
“The only thing standing in their way is their own determination to continue stuffing the windfall into the pockets of the executives,” Hasan wrote.
The oil market
Ministers from the Organization of the Petroleum Exporting Countries and its allies, including Russia (OPEC+), will meet on Wednesday. The Joint Ministerial Monitoring Committee reviews the oil market but has no power to change production quotas. However, ministers are expected to discuss possible policy changes this week.
U.S. crude futures fell about 1 percent to $77.06 a barrel on Tuesday. Last week, US crude regained support above the 50-day moving average after settling above that line early last week for the first time since mid-November.
This followed optimistic forecasts for oil demand both by the International Energy Agency (IEA) and by OPEC.
The IEA estimates that the recent easing of Covid restrictions in China will boost global oil demand to record levels in 2023. The news sent benchmark US oil and UK benchmark Brent crude to their highest levels since early December . Forecasts by the Paris, France-based IEA predict China’s reopening will push global oil demand to a record 101.7 million barrels per day (bpd) in 2023, up 1.9 million bpd from 2022. Mr.
Exxon Mobil stock
Shares of Exxon Mobil fell 0.7% on Tuesday pre trade. Shares fell 1.7% to 113.61 on Monday. Shares have formed a flat base and are up about 1% at 114.76 point of purchase. The stock trailed the S&P 500 for most of January.
ExxonMobil shares rank 3rd in the Integrated Oil & Gas Industry Group. XOM stock has 97 Composite rating of 99. The stock has a 90 relative strength rating, outstanding IBD Stock Check gauge of stock price movement. The EPS rating is 80.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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