Stocks of Exxon Mobil Rise as Profit Beat Offsets Revenue Shortfalls, and Dividends Are Raised

Exxon Mobil Corp.’s stock climbed 1.8% early Friday following its third-quarter earnings report, which revealed a strong profit despite missing revenue expectations. Additionally, Exxon increased its quarterly dividend by 4%, providing further encouragement to investors.

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For the third quarter, Exxon reported a net income of $8.61 billion, translating to $1.92 per share. This marks a significant turnaround from the previous year, where the company posted a loss of $630 million, or 22 cents per share. Revenue fell to $90.016 billion from $90.76 billion a year ago, slightly below analysts’ expectations. The FactSet consensus estimated earnings per share at $1.87 and revenue at $93.982 billion, highlighting the mixed results.

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Exxon reported $17.6 billion in cash flow from operating activities and $11.3 billion in free cash flow. Capital expenditures, including exploration costs, totaled $20 billion for the quarter, positioning the company below its full-year guidance of $28 billion in capital spending.

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In a statement, CEO Darren Woods celebrated Exxon's third-quarter performance, noting, “We delivered one of our strongest third quarters in a decade.” He highlighted that the company reached its highest liquids production in 40 years, achieving 3.2 million barrels per day. Woods attributed these achievements to ongoing transformation initiatives that have enhanced the company’s structural earnings capacity.

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He explained, “In the Upstream, we’ve doubled the profitability of the barrels we produce on a constant price basis. In Product Solutions, we’ve refined our operations to focus on high-value products, and across the company, we’ve realized $11.3 billion in structural cost savings since 2019.”

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Exxon’s total upstream net production increased by 5%, reaching 4.6 million oil-equivalent barrels per day, meeting analysts’ estimates. Upstream earnings amounted to $6.2 billion, a $916 million drop from the previous quarter, which the company attributed to lower oil prices and higher exploration costs. However, increased production and cost-saving measures helped offset these declines.

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In Exxon's energy products segment, earnings rose to $1.3 billion, an increase of $400 million from the previous quarter. This growth was driven by decreased scheduled maintenance and advantageous timing of derivatives, which more than made up for weaker industry refining margins. The segment was also affected by a temporary shutdown at Exxon’s Joliet refinery in Illinois due to a tornado, but the facility was safely and quickly restarted, exceeding expectations.

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Chemical products contributed $893 million to earnings, up from $779 million in the second quarter, making it the highest-earning quarter in over two years. Additionally, specialty products generated $794 million in earnings, compared to $751 million in the second quarter.

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Exxon also made progress in its carbon capture and storage initiatives, signing a new agreement with a client that raises CO2 offtake commitments to 6.7 million metric tons annually. This move supports Exxon's ongoing efforts to advance sustainable practices and develop low-carbon solutions.

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In addition to its earnings results, Exxon raised its quarterly dividend by 4%, now offering shareholders 99 cents per share. The dividend is scheduled to be paid on December 10 to shareholders of record as of November 14, underscoring Exxon’s commitment to returning value to investors.

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Year-to-date, Exxon’s stock has gained 16.8%, a solid increase, though it trails the broader S&P 500, which has risen 19.6% over the same period.

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