Exxon Q2 earnings report: ‘we continue to see growth’

By:
on Jul 29, 2022
  • Exxon says its net income more than tripled in the fiscal second quarter.
  • CEO Woods discussed his outlook on oil prices and demand on CNBC.
  • Shares of the American oil giant are up roughly 4.0% this morning.

Exxon Mobil Corp (NYSE: XOM) is up roughly 4.0% on Friday after its Q2 earnings report came in much better-than-expected.

CEO expects oil prices to remain high

Interestingly, CEO Darren Woods expects oil prices to remain elevated (about $100 a barrel or above) over the next five years. This morning on CNBC’s “Squawk Box”, he said:

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Bringing new investments to grow supply in the oil industry is a fairly long cycle investment, so three to five years is a reasonable timeframe to think about bringing additional significant production into the mix that’s not already in the plans.

Exxon stock is now 50% up for the year. Despite the much-talked-about recession, Woods is convinced that the demand for petroleum products is here to stay.

There’s some elasticity in demand but we continue to see growth as economies continue to recover. My expectation is to see modest growth. But even without that growth, the market still remains tight given the supply challenges.

Key figures in Exxon Q2 earnings report

  • Net income more than tripled to $17.850 billion
  • EPS of $4.21 was way above last year’s $1.10
  • Adjusted earnings per share stood at $4.14
  • Revenue shot up 75% YoY to $115.681 billion
  • Free cash flow (FCF) came in at $16.9 billion
  • Distributed $7.60 billion to shareholders

According to FactSet, experts had forecast $3.94 of adjusted EPS on $111.302 billion in revenue. CAPEX of $9.5 billion were in line with FY guidance, as per the Q2 earnings report.

To meet the higher demand, Exxon increased its oil and gas production in “Permian” by 130,000 BOE per day. Refining throughput, the company added, was up 180,000 BOE versus last year.

Wall Street currently rates Exxon stock at “overweight”.

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