Exxon posts mixed Q4 results with higher oil production, weak refining profit
By Sheila Dang
HOUSTON (Reuters) -Exxon Mobil on Friday posted mixed fourth-quarter results that showed weakness in its refining and chemicals business, though it beat Wall Street's profit estimate with higher oil and gas production.
Shares of the No. 1 U.S. oil producer declined 1.7% to $107.72 in afternoon trading, which was in line with a drop in the broader S&P 500 Energy Sector index.
Oil companies were pressured over the past year by lower oil prices and refining margins, as demand for fuel globally has lagged expectations. Other oil majors including Chevron and Shell were also hurt by the weaker market, with Chevron posting a loss in its refining business for the first time since 2020.
Exxon's adjusted profit for the fourth quarter was $7.39 billion or $1.67 per share, beating analyst estimates of $1.56, LSEG data showed.
Earnings from oil and gas production were $6.28 billion, up from $4.15 billion in the same quarter last year. Production, including from the Permian basin and lucrative projects in Guyana, reached 4.6 million barrels of oil equivalent per day, growing from 4.58 million in the third quarter.
During a conference call with analysts, Exxon CEO Darren Woods said the company aimed to be efficient with spending plans and would only pursue investments, including in the low carbon solutions business, if it was confident it could generate high returns.
Exxon laid out a five-year plan in December to increase project spending to boost oil and gas output by 18% by 2030.
"We're not going to go ahead with them until we're convinced that the value is there," Woods said.
Total adjusted earnings for 2024 were $33.46 billion, down from $38.57 billion the year earlier.
CHEMICAL AND REFINING SLUMP
Exxon's results were helped by favorable tax and year-end adjustments, said Paul Cheng, an analyst at Scotiabank, in a research note. Lower corporate costs also enabled the company to beat profit estimates, said RBC Capital Markets analyst Biraj Borkhataria.
Earnings from producing gasoline and diesel were $323 million, a large fall from $3.2 billion a year earlier. The startup of new oil refineries by other companies in Asia and Africa led to higher global fuel supply, even as demand for gasoline and diesel lagged expectations.
The refining business remains under pressure as the additional supply enters the market, Chief Financial Officer Kathryn Mikells said in an interview.
"That's really what we're watching as we look ahead to 2025," she said.
Adjusted profit from producing chemicals fell 76% from the third quarter to $215 million due to weaker margins and seasonally higher expenses, the company said. The figure is the worst since 2019, Borkhataria said.
