Exxon signals fourth quarterly profit in a row despite charges
ExxonMobil Corp on Thursday signaled a return to annual profit for 2021 as stronger oil and gas prices drove a gain of up to $1.9 B in operating profits that exceeded one-time charges.
The largest U.S. oil producer issued a snapshot of final quarter results that showed it expects sequentially higher profit from oil and gas production. Operating profits in refining and chemicals will be flat to lower, a securities filing showed. Official results are due out Feb. 1.
In 2020, Exxon suffered a historic $22.4 B loss on writedowns from falling oil prices and lower refining margins. Cost cuts coupled with energy price gains have allowed it to pay down debt and plot a share buyback program next year.
Analysts forecast an adjusted profit of $1.76 per share for the quarter, according to Refinitiv IBES data, compared to 3 cents a share excluding writedowns a year-ago.
Thursday's regulatory filing signaled one-time charges for asset impairments and contractual costs could lower oil and gas earnings by up to $1.2 B. It did not provide details on the production assets affected.
Exxon also said lower margins in chemicals could lower results by $600 MM—$800 MM, compared to the $2.14 B third-quarter chemicals profit. Refining margins could stay flat or drop by $200 MM compared to the $1.23 B profit the previous quarter.
Offsetting the negative impacts, Exxon signaled mark-to-market gains of up to $1.1 B for oil and gas and in refined products. It also said proceeds from asset sales including its U.K. North Sea assets could deliver up to $500 MM.
The rosier outlook allowed Exxon to extend planned a $20-25 B per year outlay on new projects through 2027, including $2.5 B per year on carbon reductions, the company has said, adding it expects to double its pre-pandemic annual profit by 2025, the company has said.
About 60% of its spending will be in key growth areas of U.S. shale, Guyana, Brazil, LNG, and chemical products.
Exxon shares fell 36 cents or about 0.59% on Thursday to close at $60.79. The stock is up 47% so far this year but down 33% over the last five years.
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