ExxonMobil Beats EPS, Guyana Production Soars

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ExxonMobil delivered strong Q2 2024 earnings, surpassing EPS estimates.

Key PointsEarnings per share came in at $2.14, beating analysts' estimate of $2.02.Total revenue reached $93.06 billion, exceeding estimates of $90.09 billion.Net production increased 15%, helped by Guyana and Permian operations. Oil and gas giant ExxonMobil (XOM -0.06%) reported its second-quarter results for 2024 on Aug. 2, highlighting a strong performance in earnings.

The company posted earnings per share (EPS) of $2.14, beating the analyst consensus estimate of $2.02. Overall revenue came in at $93.06 billion, ahead of the $90.09 billion that analysts had expected. The quarter showcased significant progress in key operational areas and sustained profitability.

MetricQ2 2024 ActualAnalyst EstimateQ2 2023 ActualChange (YoY)EPS$2.14$2.02$1.94+10.3%Total Revenue (in billions)$93.06$90.09$82.91+12.2%Net Income (in billions)$9.24N/A$7.88+17.3%Free Cash Flow (in billions)$15.02N/A$16.44-8.6% Source: Analyst estimates for the quarter provided by FactSet.

Understanding ExxonMobil ExxonMobil, a leading oil and gas company, is primarily involved in the exploration, production, and sale of crude oil and natural gas. The company also manufactures petroleum products, petrochemicals, and specialty products. Recent strategic focuses include enhancing its exploration and production (E&P) capabilities, investing in lower-emission technologies, and pursuing innovation through proprietary technologies and patents.

Quarterly Highlights During Q2 2024, ExxonMobil experienced a notable 15% increase in its total net production, reaching 4.4 million oil-equivalent barrels per day, up from 3.8 million in Q1. This growth was driven by record production levels in Guyana and Permian operations, following the completion of the Pioneer Natural Resources acquisition.

The company's Upstream segment recorded earnings of $7.1 billion, a $1.4 billion increase from Q1, primarily due to the Pioneer acquisition, higher crude oil realizations, and structural cost savings.

ExxonMobil also made strides in lower-emission technologies. It signed an agreement to transport and store up to 500,000 metric tons of CO2 annually from CF Industries, raising the total CO2 offtake to 5.5 million metric tons per year. In collaboration with Air Liquide, ExxonMobil plans to produce virtually carbon-free hydrogen at its Baytown, Texas, facility, expected to capture approximately 98% of associated CO2 emissions.

In terms of financial performance, ExxonMobil reported a robust free cash flow of $15.02 billion, excluding working capital, reflecting its efficient operations and ability to fund future investments and shareholder distributions. The company distributed $9.5 billion to shareholders, including $4.3 billion in dividends and $5.2 billion in share repurchases. Additionally, ExxonMobil maintained a solid balance sheet with a debt-to-capital ratio of 14% and a net-debt-to-capital ratio of 6%.

From a strategic perspective, the completion of the Pioneer merger five months ahead of schedule added $0.5 billion to earnings within the first two months post-closing. The Hammerhead project application was submitted in Guyana, anticipating production capacity between 120,000 to 180,000 barrels per day by 2029.

Looking Ahead Looking forward, ExxonMobil's management remains optimistic about sustaining growth through strategic investments and innovations. The company projects ongoing investments in lower-emission technologies, envisioning the market for such technologies to reach $6 trillion by 2050. Additionally, ExxonMobil aims to achieve over $15 billion in structural cost savings by 2027, primarily through reduced Upstream operational costs and streamlined processes.

Investors should watch for continued progress in ExxonMobil's lower-emission projects, such as the Baytown hydrogen facility and the Hammerhead project in Guyana. Notably, management's forward guidance indicates robust shareholder returns and capital allocation post-Pioneer merger completion.

JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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