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Exxon signals fourth quarterly profit in a row despite charges

Stock MarketsDec 30, 2021 06:30PM ET
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2/2 © Reuters. FILE PHOTO: Signage is seen at an Exxon gas station in Brooklyn, New York City, U.S., November 23, 2021. REUTERS/Andrew Kelly 2/2

By Sabrina Valle

HOUSTON (Reuters) -Exxon Mobil Corp on Thursday signaled a return to annual profit for 2021 as stronger oil and gas prices drove a gain of up to $1.9 billion in operating profits that exceeded one-time charges.

The largest U.S. oil producer issued a snapshot of final quarter results that showed it expects sequentially higher profit from oil and gas production. Operating profits in refining and chemicals will be flat to lower, a securities filing showed. Official results are due out Feb. 1.

In 2020, Exxon (NYSE:XOM) suffered a historic $22.4 billion loss on writedowns from falling oil prices and lower refining margins. Cost cuts coupled with energy price gains have allowed it to pay down debt and plot a share buyback program next year.

Analysts forecast an adjusted profit of $1.76 per share for the quarter, according to Refinitiv IBES data, compared to 3 cents a share excluding writedowns a year-ago.

Thursday's regulatory filing signaled one-time charges for asset impairments and contractual costs could lower oil and gas earnings by up to $1.2 billion. It did not provide details on the production assets affected.

Exxon also said lower margins in chemicals could lower results by $600 million to $800 million, compared to the $2.14 billion third-quarter chemicals profit. Refining margins could stay flat or drop by $200 million compared to the $1.23 billion profit the previous quarter.

Offsetting the negative impacts, Exxon signaled mark-to-market gains of up to $1.1 billion for oil and gas and in refined products. It also said proceeds from asset sales including its U.K. North Sea assets could deliver up to $500 million.

The rosier outlook allowed Exxon to extend planned a $20-25 billion per year outlay on new projects through 2027, including $2.5 billion per year on carbon reductions, the company has said, adding it expects to double its pre-pandemic annual profit by 2025, the company has said.

About 60% of its spending will be in key growth areas of U.S. shale, Guyana, Brazil, LNG, and chemical products.

Exxon shares fell 36 cents or about 0.59% on Thursday to close at $60.79. The stock is up 47% so far this year but down 33% over the last five years.

Exxon signals fourth quarterly profit in a row despite charges
 

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Alan Rice
Alan Rice Dec 30, 2021 8:01PM ET
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Exxon: You folks are leaving Billions of bucks (profits) "ON the table". THINK about it.
 
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