Exxon Mobil Reports a 54% Plunge in Q3 Profits Amid Oil Price Recovery
Exxon Mobil Corp, the largest oil producer in the United States, has seen a significant drop in its third-quarter profits as compared to last year’s record earnings. The company reported a 54% decline, with profits totaling $9.1 billion. However, this figure marks an improvement from the previous quarter, thanks to the recovery of oil prices.
The strong performance of Exxon Mobil can be attributed to the rebound in crude oil prices and the increased demand for gasoline and diesel following the impact of the COVID-19 pandemic. Despite this, the company’s chemical profits and refining margins have suffered, leading Wall Street to revise its third-quarter outlook.
Although the drop in profits may seem concerning, Exxon Mobil’s robust financial position has allowed it to pursue two all-stock deals. The first is for Pioneer Natural Resources, a shale rival, and the second is for Denbury, a carbon pipeline operator. These deals were made possible as the company’s shares were trading near an all-time high.
In the third quarter, the company’s profit per share stood at $2.25 compared to $4.68 during the same period last year when oil and gas prices surged due to Russia’s invasion of Ukraine. The improved performance can be attributed to the average global oil prices of $85.92 per barrel in the quarter, up from $77.73 in the second quarter.
However, the chemical business of Exxon Mobil has experienced challenges due to higher costs of raw materials. Despite this setback, the company’s cash reserves have continued to grow, reaching $33 billion, a 10% increase from the second quarter.
Chief Financial Officer Kathryn Mikells expressed confidence in the company’s cash balance, stating that it puts them in a favorable position to navigate any future volatility in the commodity cycle. Exxon Mobil remains committed to ensuring flexibility and adaptability in the face of potential market downturns.
Overall, while Exxon Mobil’s profits have declined, the company’s resilience in the face of challenging market conditions and its ability to capitalize on improving oil prices demonstrate its commitment to staying ahead in the industry. With its strong cash reserves and strategic deals, Exxon Mobil is positioned to weather uncertainties and maintain its leading position in the U.S. oil sector.
