Executive Summary
Exxon Mobil Corporation reported a net income of $7.63 billion for Q4 2023, a decrease of 40.16% year-over-year, with a revenue of $81.69 billion, down 14.65% compared to Q4 2022. Despite the decline in earnings, management emphasized that their strategy of operational excellence and cost management has delivered significant earnings and cash flow growth since 2019. The company achieved a remarkable return on capital employed of 15% and expects to shift its capital allocation towards lower-carbon initiatives. Exxon is committed to investment in its portfolio, with estimated capital expenditures of $23-25 billion for 2024, focusing on high-value operations and innovative solutions in the energy market.
Key Performance Indicators
QoQ: -7.77% | YoY:-14.65%
QoQ: -20.91% | YoY:-52.98%
QoQ: -28.59% | YoY:-58.04%
QoQ: -15.88% | YoY:-40.16%
QoQ: -14.67% | YoY:-38.46%
Key Insights
Exxon Mobil's financial metrics for Q4 2023 reveal a gross profit of $17.70 billion with a gross profit margin of 21.67%. Operating income stood at $8.46 billion, reflecting an operating income margin of 10.35%. The decline in earnings metrics (net income down 40.16% YoY) was influenced by a significant drop in oil prices and global demand pressures. The EBITDA of $18.64 billion yielded an EBITDA margin of 22.83%, although this marked a decline from previous quarters. Year-over-year compari...
Financial Highlights
Exxon Mobil's financial metrics for Q4 2023 reveal a gross profit of $17.70 billion with a gross profit margin of 21.67%. Operating income stood at $8.46 billion, reflecting an operating income margin of 10.35%. The decline in earnings metrics (net income down 40.16% YoY) was influenced by a significant drop in oil prices and global demand pressures. The EBITDA of $18.64 billion yielded an EBITDA margin of 22.83%, although this marked a decline from previous quarters. Year-over-year comparisons show a clear downward trend in financial performance, yet the company's operational efficiency remains a focus.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
81.69B |
-14.65% |
-7.77% |
| Gross Profit |
17.70B |
-52.98% |
-20.91% |
| Operating Income |
8.46B |
-58.04% |
-28.59% |
| Net Income |
7.63B |
-40.16% |
-15.88% |
| EPS |
1.92 |
-38.46% |
-14.67% |
Key Financial Ratios
operatingProfitMargin
10.4%
operatingCashFlowPerShare
$3.45
freeCashFlowPerShare
$1.88
dividendPayoutRatio
50.3%
Management Commentary
Darren Woods, CEO, highlighted the ongoing commitment to operational excellence, stating, 'By any measure, 2023 was an outstanding year. We delivered $36 billion of earnings, strong cash flows… our strategy is delivering results that lead industry across a range of metrics.' Management also discussed the strategic acquisitions of Denbury and Pioneer Natural Resources, emphasizing their importance to accelerating low carbon solutions and enhancing upstream operations: 'With the capabilities of our two companies combined, we expect to recover more resources efficiently with lower emissions.' Furthermore, Woods noted plans to invest $23-25 billion in 2024 to grow their portfolio of advantaged, low-cost supply assets.
By any measure, 2023 was an outstanding year. We delivered $36 billion of earnings, strong cash flows… our strategy is delivering results that lead industry across a range of metrics.
— Darren Woods
We expect to grow our portfolio of advantaged, low-cost of supply assets, further shift our product mix towards higher value, higher margin performance products, and reduce emissions, both our own and others.
— Darren Woods
Forward Guidance
Looking ahead, Exxon Mobil's management expressed confidence in achieving structural cost savings of $15 billion by 2027, supporting a continued strong operational performance. The company aims to further integrate their recent acquisitions to enhance production efficiencies and reduce emissions. Key areas of focus will include optimizing their supply chain, enhancing maintenance operations, and leveraging new technologies in their low carbon initiatives. Investors are advised to closely monitor the execution of these strategic initiatives, as well as quarterly performance against cost-saving benchmarks.