Exchange: NYSE | Sector: Energy | Industry: Oil Gas Integrated
Q3 2024
Published: Nov 4, 2024
Earnings Highlights
Revenue of $87.79B down 0.9% year-over-year
EPS of $1.93 decreased by 14.2% from previous year
Gross margin of 23.2%
Net income of 8.61B
"Darren Woods: 'Our Energy Products business provides a compelling proof point. In 2024, year-to-date earnings are roughly double what they were in the same period of 2019 on a constant margin basis.'" - Darren Woods
Exxon Mobil Corporation (XOM) Q3 2024 Results: A Resilient Performance Amid Tough Conditions
Executive Summary
Exxon Mobil Corporation (XOM) reported a robust Q3 2024, generating $8.6 billion in net income, showcasing strong operational efficiency and resilience amid a challenging market environment. Revenue for the quarter reached $87.8 billion, largely driven by a 24% increase in oil-equivalent production to 4.6 million bpd, attributed to successful integration with Pioneer and improvements in the upstream business. Management emphasized continued focus on cost reduction, higher-return investments, and strategic divestments as part of their enterprise-wide transformation strategy. Despite fluctuations in refining margins and liquid prices, gains in other sectors like gas and chemical margins boosted overall profitability, solidifying Exxon’s competitive position in the integrated oil and gas sector.
Key Performance Indicators
Revenue
87.79B
QoQ: -2.44% | YoY:-0.88%
Gross Profit
20.39B
23.23% margin
QoQ: 0.97% | YoY:-8.90%
Operating Income
11.04B
QoQ: 1.34% | YoY:-6.77%
Net Income
8.61B
QoQ: -6.82% | YoY:-5.07%
EPS
1.93
QoQ: -9.81% | YoY:-14.22%
Revenue Trend
Margin Analysis
Key Insights
**Revenue:** $87.8 billion (down 0.88% YoY, down 2.44% QoQ)
**Gross Profit:** $20.4 billion (down 8.90% YoY, up 0.97% QoQ)
**Net Income:** $8.6 billion (down 5.07% YoY, down 6.82% QoQ)
**EPS:** $1.93 (down 14.22% YoY, down 9.81% QoQ)
**Operating Income:** $11.0 billion (down 6.77% YoY, up 1.34% QoQ)
Financial Highlights
### Key Financial Metrics
- Revenue: $87.8 billion (down 0.88% YoY, down 2.44% QoQ)
- Gross Profit: $20.4 billion (down 8.90% YoY, up 0.97% QoQ)
- Net Income: $8.6 billion (down 5.07% YoY, down 6.82% QoQ)
- EPS: $1.93 (down 14.22% YoY, down 9.81% QoQ)
- Operating Income: $11.0 billion (down 6.77% YoY, up 1.34% QoQ)
- Free Cash Flow: $11.4 billion
- Current Ratio: 1.35
- Debt to Capitalization: 5%
- Payout Ratio: 49.2% (Annual Dividend Growth: 4% increase)
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
87.79B
-0.88%
-2.44%
Gross Profit
20.39B
-8.90%
0.97%
Operating Income
11.04B
-6.77%
1.34%
Net Income
8.61B
-5.07%
-6.82%
EPS
1.93
-14.22%
-9.81%
Key Financial Ratios
currentRatio
1.35
grossProfitMargin
23.2%
operatingProfitMargin
12.6%
netProfitMargin
9.81%
returnOnAssets
1.86%
returnOnEquity
3.21%
debtEquityRatio
0.16
operatingCashFlowPerShare
$3.94
freeCashFlowPerShare
$2.56
dividendPayoutRatio
49.2%
priceToBookRatio
1.95
priceEarningsRatio
15.19
Net Income vs. Revenue
Expense Breakdown
Management Commentary
### Management Insights
- On Financial Performance: Darren Woods stated, "Our Energy Products business provides a compelling proof point. In 2024, year-to-date earnings are roughly double what they were in the same period of 2019 on a constant margin basis."
- On Cost Efficiency: He highlighted, "In our overall Product Solutions business, we've reduced cost by $5 billion versus 2019."
- On Growth in Production: Woods noted, "In the third quarter, we grew production to 4.6 million oil-equivalent barrels per day, a 24% increase versus the prior-year quarter."
- On Challenges Overcome: Discussing the impact of a tornado at the Joliet Refinery, he remarked, "Thanks to their remarkable efforts, we beat an aggressive recovery schedule and we're supplying much needed fuel to the market far faster than we thought possible, reducing the time to recover by a third."
Darren Woods: 'Our Energy Products business provides a compelling proof point. In 2024, year-to-date earnings are roughly double what they were in the same period of 2019 on a constant margin basis.'
— Darren Woods
Kathy Mikells: 'On a year-to-date basis, our advantaged volume growth in upstream gave us almost $3 billion of incremental earnings and that's the engine that we're counting on long-term.'
— Kathy Mikells
Forward Guidance
Management expressed optimism toward future revenue and profit growth driven by their focus on strategic integrations and cost efficiencies. They plan to further leverage synergies from the Pioneer acquisition, targeting an ongoing increase in oil production alongside competitive pricing strategies. With anticipated growth outcomes from their low-carbon solutions and other technology-driven investments, stakeholders are urged to watch for developments related to regulatory environment adjustments and execution of their cost-reduction strategies which cumulatively aim for $15 billion in total by 2027.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
XOM Focus
23.23%
12.60%
3.21%
15.19%
SHEL
15.70%
10.40%
2.29%
11.92%
BP
15.90%
6.82%
0.32%
103.76%
SU
45.30%
N/A
4.48%
7.84%
PBR
51.40%
37.70%
8.12%
3.28%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Exxon Mobil Corporation's consistent dividend policy, commitment to cost control, and focus on high-return project investments place it in a strong position to weather market volatility. With increased production capabilities and operational efficiencies, investors can expect positive returns, buoyed by performance in both traditional and growing energy markets. Continued monitoring of pricing pressures and regulatory developments will be important for assessing future performance, especially as growth initiatives in low-carbon technologies unfold.
Key Investment Factors
Growth Potential
Exxon Mobil is well-positioned for growth due to strategic asset integration, particularly with Pioneer, and advancements in production technology and carbon capture initiatives.
Profitability Risk
Market volatility in oil and gas prices coupled with potential regulatory changes related to carbon emissions presents an ongoing risk to profit margins.
Financial Position
Exxon maintains a strong balance sheet, demonstrated by low debt levels (only 5% net debt to capital), allowing for flexibility in capital allocation and strategic investments.
SWOT Analysis
Strengths
Strong balance sheet with a low debt ratio
Established brand loyalty and market presence
Robust operational improvements leading to increased production efficiency
Weaknesses
Dependency on oil prices, which are volatile
High operational costs associated with refining processes
Opportunities
Expansion in low-carbon technologies and hydrogen production projects
Potential growth markets emerging in the Asia-Pacific region
Increased demand for advanced chemical solutions
Threats
Continued pressure from regulatory changes regarding carbon emissions
Geopolitical instability affecting oil production and prices