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Oil prices fell about 4 percent on Monday as renewed peace talks between the U.S. and Iran eased worries that the conflict would disrupt global energy supplies. This drop reversed many of the gains seen last week when supply risks were higher.
For a company like ExxonMobil, lower oil prices mean it earns less for every barrel it pumps. While the company has worked hard to lower its production costs in places like Guyana, its stock price and profits are still closely tied to the global price of crude oil.
Source: WSJ
After ExxonMobil's October results, we updated our fair value and raised our quality score to 4.3. We changed our rating from Buy to Watch and increased our growth score for sales and industry durability. We have added the company's leading share of diesel production and its commitment to buy back $20 billion of its own stock in 2027 to what we track. We also adjusted our profit projections to account for the impact of oil derivative timing and the permanent savings of $16.9 billion in annual operating costs.
ExxonMobil reported adjusted earnings of $4.23 per share, beating the $4.12 analysts expected. While revenue of $103.36 billion was slightly lower than predicted, the company is extracting more value from its core assets. It reached a major milestone of 1 billion total barrels produced at its Guyana project, which is a critical part of its plan to own the lowest-cost oil reserves in the world.
Management also raised the dividend for the 44th year in a row and announced plans to buy back $20 billion of its own shares next year. Buying back shares reduces the total number of shares in the market, which makes each remaining share own a larger piece of the company's profits. These moves show the company is generating enough cash from its oil and gas business to reward owners even while spending heavily on new projects.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
ExxonMobil and Chevron have reportedly canceled executive trips to ADIPEC, one of the world's largest energy industry conferences. While no specific reason was given, the move comes during a period of record-high ship attacks in the Strait of Hormuz. This is a minor logistical change that does not affect the company's operations or its ability to produce and sell oil.
Source: Reuters
European natural gas prices touched €100 per megawatt hour on Wednesday, a level not seen since late 2022. The price jump follows continued shipping disruptions in the Middle East that have slowed the arrival of liquefied natural gas (LNG) to the continent.
This is a positive development for ExxonMobil because it is one of the world's largest producers of natural gas. When global prices rise due to supply constraints, the company earns more profit on every unit it sells. While the company is often associated with oil, its massive gas business provides a significant boost to its cash flow during periods of energy scarcity in Europe.
Source: Reuters
Management consistently sets a bar they can clear, beating analyst targets in six of the last eight quarters as low-cost production growth outpaces expectations.
| Expectation | |
|---|---|
| EPS | $4.09 |
| Revenue | $116.49B |