What ExxonMobil (XOM) Said on Its Q3 Earnings Call

Key Points

• ExxonMobil reported strong third-quarter results, with $15.4 billion in GAAP earnings and $25.7 billion in operating cash flow, helped by higher prices and constrained refined-product supplies.
• The company’s refining operations reached record utilization, while Gulf Coast investments boosted diesel yields and contributed roughly $3.5 billion in year-to-date margins. ExxonMobil is pursuing further projects expected to increase distillate output by about 100,000 barrels per day.
• ExxonMobil returned $9.4 billion to shareholders, raised its dividend 4% for the 44th consecutive annual increase, and reduced net debt by more than $9 billion. It also expects continued growth from Guyana, the Permian Basin, LNG projects and automation technologies.

ExxonMobil NYSE: XOM reported third-quarter GAAP earnings of $15.4 billion and cash flow from operations of $25.7 billion, as higher prices and constrained supplies for refined products supported results amid ongoing conflict in the Middle East.

Chairman and Chief Executive Officer Darren Woods said disruptions to trade flows and supplies of crude oil, diesel, gasoline and other products had contributed to tighter markets and higher prices. He said the company’s investments in production, refining capacity and global logistics positioned it to increase supply during the period.

“We recognize the impact high prices have on people’s lives and economic growth,” Woods said, adding that ExxonMobil has focused on growing “advantaged production” through commodity cycles.

Refining Operations and Gulf Coast Investments

Woods said ExxonMobil operated its fuels manufacturing facilities, excluding Middle East impacts, at its highest utilization level on record. The company ran about 3.6 million barrels of crude daily through its refineries and sold roughly 5.7 million barrels per day of gasoline, diesel and other finished products globally, he said.

Year to date, the company produced about 1.1 million barrels per day of diesel, according to Woods. He highlighted ExxonMobil’s 2023 Beaumont, Texas, expansion, a $2 billion project that added refining capacity equivalent to a medium-sized refinery. Woods said the investment paid for itself in roughly three years.

The company is pursuing additional U.S. Gulf Coast reconfiguration projects intended to raise distillate yield by about 100,000 barrels per day. The first phase is underway at Baytown, while additional work is planned at Baton Rouge and Beaumont to increase output of diesel, lubricants and chemical feedstocks.

Senior Vice President and Chief Financial Officer Neil Hansen said diesel yield was about 3.5% higher than in 2019. He said that increase represented roughly $1.5 billion in quarterly margins this year, or $3.5 billion year to date. On a constant-margin basis, Hansen said volume and product-mix improvements combined with structural cost reductions have tripled underlying energy-products unit earnings since 2019.

Capital Returns and Balance Sheet

During the quarter, ExxonMobil invested $7 billion in its businesses and returned $9.4 billion to shareholders through dividends and share repurchases. The company announced a 4% increase in its dividend per share, marking its 44th consecutive year of annual dividend-per-share growth.

It also said it plans to maintain share repurchases at $20 billion in 2027, subject to reasonable market conditions. Woods said the company aims to provide relatively consistent shareholder distributions across commodity cycles rather than increase commitments sharply during periods of high prices and retreat during weaker markets.

Hansen said ExxonMobil reduced net debt by more than $9 billion during the quarter. He said the company’s financial capacity enables it to maintain capital investment and shareholder distributions through different commodity-price environments.

Upstream, LNG and Technology Plans

Excluding Middle East impacts, Woods said upstream production rose year over year, supported by growth in the Permian Basin and Guyana. Production from Guyana’s Stabroek Block surpassed 1 billion barrels of oil 11 years after discovery, he said. ExxonMobil expects the Uaru development, its fifth in Guyana, to begin production in the fourth quarter.

In the Permian, Woods said ExxonMobil reached its production guidance earlier than expected but remains focused on efficient capital deployment and technology rather than volume alone. The company has three automated drilling rigs in operation and expects to expand their use to about 25% of its Permian fleet next year and about half by 2028.

Woods said ExxonMobil is also pursuing technologies to improve primary and secondary recovery in the basin, with secondary-recovery opportunities expected to become more significant in the years beyond 2030.

In liquefied natural gas, the company said cumulative LNG production from PNG LNG has exceeded 100 million metric tons. ExxonMobil agreed to increase its working interest and take operatorship of Papua LNG. It also reached an agreement with Eni to increase its operated interest in Rovuma LNG in Mozambique to 50% while exiting a non-operated acreage position.

Woods said ExxonMobil still expected to make a final investment decision on Rovuma LNG by year-end, subject to completing work with partners and the government. At Golden Pass, he said Train 2 was expected to be substantially complete by December before commissioning, while Train 3 was expected to reach mechanical completion in mid-2027.

Market Disruptions and Longer-Term Portfolio

Woods said a shortage of products has been exacerbated by reduced Middle East exports and refinery outages in Russia. He estimated that roughly one-third of the current global product shortage stems from the inability to move clean products from the Middle East to world markets. He also said ExxonMobil estimates that roughly half of Russia’s refining capacity has been taken offline.

He said normalization in refining markets would depend on the restoration of regional logistics, refinery repairs and potentially greater Chinese exports. Woods said he expects conditions may take “well through next year” to move closer to normal, while acknowledging that the timeline could be longer.

ExxonMobil also cited longer-term opportunities in Guyana, LNG, exploration and higher-value product businesses. Hansen said the company has invested about $1 billion annually in exploration over the past five years and pointed to discoveries in Guyana, Angola and Cyprus.

Woods said the company is seeking greater operatorship and ownership stakes where it can apply its project, technology and operating capabilities. He said ExxonMobil is evaluating possible future opportunities in Venezuela and Kazakhstan, but stressed that progress would depend on commercial terms, legal frameworks and investor protections.

About ExxonMobil (NYSE:XOM)

Exxon Mobil Corporation, doing business as ExxonMobil NYSE: XOM, is an integrated energy company engaged in the exploration, development, production, and sale of crude oil and natural gas. Its operations span the energy value chain, from resource development and refining to the marketing and distribution of fuels and other energy products.

Through its Energy Products segment, ExxonMobil manufactures and markets transportation fuels, lubricants, and other petroleum-based products. Its Chemical Products business produces petrochemicals, including commodity and performance products used in packaging, automotive components, construction materials, and consumer goods.

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