Exxon Mobil Corp., a leading player in the oil industry, witnessed its profits in the fourth quarter tumble by 40 percent compared to the previous year. The drop is attributable to lower revenue generation from crude oil and natural gas, and a decrease in industry refining margins. Although the adjusted earnings per share surpassed what analysts had projected, there was a shortfall in quarterly revenues.
The company's net income for the fourth quarter dropped drastically to $7.63 billion or $1.91 per share versus $12.75 billion or $3.09 per share in the same quarter of the preceding year. The latest quarter was marred by unfavorable items costing $2.3 billion, largely due to a $2.0 billion impairment related to regulatory hurdles in California, which prohibited the recovery of production and distribution assets. This decline, however, was partly mitigated by positive tax and divestment-related items.
After accounting for special items, the adjusted earnings stood at $2.48 per share, a significant decrease from $3.40 per share in the year-ago quarter. On average, 16 analysts polled by Thomson Reuters predicted the company would report earnings of $2.21 per share for the quarter, typically excluding special items.
The overall revenues and other income for the quarter dropped to $84.34 billion, down from $95.43 billion in the same quarter of the previous year. The expected revenues, according to Wall Street, were $85.23 billion for the quarter.
The quarter's oil-equivalent production remained stable compared to last year at 3.82 million barrels per day. Meanwhile, the upstream segment earnings of ExxonMobil were cut in half to $4.15 billion from $8.20 billion last year, due to lower crude realizations, unfavorable tax impacts, and inventory effects at the year-end.
The energy products segment reported earnings of $3.21 billion, marking a decrease from the $4.07 billion generated last year, while the chemicals segment's earnings fell to $189 million from $250 million. The specialty products segment also observed a decrease in earnings from $760 million last year to $650 million.
The company incurred $7.76 billion in capital and exploration expenditures in the fourth quarter, which was an increase from $7.46 billion in the previous year. These expenditures took the year-to-date 2023 expenditures to $26.3 billion, marginally above the top end of the guidance range.
ExxonMobil maintained its focus on strengthening its portfolio, concluding the divestment of the East Texas upstream assets in the fourth quarter. Throughout the year, the total asset sales and divestments managed to generate cash proceeds of $4.1 billion.
Furthermore, the company announced a first-quarter dividend of $0.95 per share, payable on March 11, 2024, to the shareholders possessing Common Stock at the close of business on February 14, 2024.
In addition, ExxonMobil introduced its new Mobil Lithium business during the quarter, which has the potential to accommodate the supply for up to one million electric vehicles annually by 2030. The company aims for the first production to start in 2027.
