Exxon Mobil Corporation Q3 2024: Profit Margin Rise Amid Cost Cuts and Dividend Boost
Initial Sentiment:
Exxon Mobil Corporation (XOM) saw its shares soar after publishing its third-quarter (Q3) 2024 financial results. The company’s revenue and profit figures have shown continued resilience despite a slightly lower-than-expected revenue forecast.
Revenue and Income
Exxon Mobil reported a total revenue of $90.016 billion for Q3 2024, which came in below the forecast of $93.938 billion. Although the revenue figure demonstrated growth from the prior quarter, it misses the market’s high expectations.
Profit Margins and EPS
The net adjusted profit margin for Exxon Mobil declined to $8.61 billion for Q3 2024, a $0.63 billion decrease from theonical earnings report of $9.24 billion posted in the previous quarter. This dovetailed with the company’s earnings per share (EPS) of $1.92, which managed to outperform the consensus estimate of $1.88.
Capital Expenditures (CapEx)
The company’s capital and exploration expenditures were recorded at $7.16 billion during Q3 2024, bringing the annual expenses to $20 billion. This expenditure aligns with the corporate year-to-date guidance which aimed for $28 billion by the end of 2024.
Latest Exploration Milestones
A significant milestone in Exxon Mobil’s recent activities was the completion of Phase 1 of its offshore Crete exploration venture with Hellenic ENERGY, where 7,789 kilometers of seismic data was gathered.
Cost Reduction Strategies
The company has achieved substantial financial savings through its economic restructuring measures. Exxon has accrued cumulative structural cost savings of $11.3 billion since 2019, including incremental savings of $2.2 billion during the 2024 year and a further $0.6 billion in Q3 itself. Further optimization of expenditures is expected as Exxon plans to deliver cumulative savings of $15 billion by the end of 2027.
Dividend Boost
In a move to increase shareholder value, Exxon Mobil doubled its dividend per share (DPS) to $0.99 from its previous rate of $0.95, effective for December 10. The company’s year-to-date shareholder distributions totaled $26.1 billion, combining both dividends and share repurchases worth $12.3 billion and $13.8 billion respectively.
Executive Commentary
Darren Woods, Chairman and Chief Executive Officer, highlighted the company’s industry-leading performance stating, "Our enterprise-wide transformation is now becoming increasingly visible in improving the structural earnings power of our business. We have doubled the profitability of our barrel production, and high-graded our refining footprint to increase high-value product sales."
Investment Opportunities
Investors keen on exposure to XOM can opt for investment via the EA Series Trust Strive U.S. Energy ETF (DRLL) and the SPDR Select Sector Fund Energy Select Sector ETF (XLE).
Price Performance
As of last reported trading, XOM shares were up 2.07% to $119.20. This upsurge has been fueled by positive earnings reports, cost-saving measures, and the dividend increase.
Call to Action
Looking ahead, shareholders and potential investors are encouraged to closely monitor Exxon Mobil’s quarterly updates, particularly focusing on upcoming financial results and potential EPS surprises. Staying informed with institutional insightful analysis can be key as the energy sector continues to evolve and adapt to global market dynamics.