Exchange: NYSE | Sector: Energy | Industry: Oil Gas Integrated
Q2 2024
Published: Aug 5, 2024
Earnings Highlights
Revenue of $89.99B up 11.4% year-over-year
EPS of $2.14 increased by 10.3% from previous year
Gross margin of 22.4%
Net income of 9.24B
""In the second quarter we delivered earnings of $9.2 billion, our second best second quarter results in the last 10 years."" - Darren Woods, Chairman and CEO
For the second quarter of 2024, Exxon Mobil Corporation (XOM) reported significant financial achievements, including net income of $9.2 billion, marking its second-best Q2 performance in the last decade. This robust performance is attributed to record production rates from its strategic assets in Guyana and the Permian Basin, reflecting Exxon’s operational efficiency and strategic acquisitions, notably the Pioneer transaction. Despite softer overall market conditions, oil prices remained stable, enabling the company to successfully navigate challenges and maintain positive cash flow. Management reiterated confidence in Exxon’s capital allocation strategy, including a commitment to returning $9.5 billion to shareholders through dividends and stock buybacks.
Net Income: $9.24 billion (up 12.41% QoQ, 17.26% YoY)
EPS: $2.14 (up 3.88% QoQ, 10.31% YoY)
Gross Profit Margin: 22.4%
Operating Income Margin: 12.1%
Financial Highlights
Exxon’s financial metrics for Q2 2024 include:
- Revenue: $89.986 billion (up 11.91% QoQ, 11.38% YoY)
- Net Income: $9.24 billion (up 12.41% QoQ, 17.26% YoY)
- EPS: $2.14 (up 3.88% QoQ, 10.31% YoY)
- Gross Profit Margin: 22.4%
- Operating Income Margin: 12.1%
- Current Ratio: 1.36, indicating strong liquidity.
Management attributed this YoY increase to enhanced production efficiencies and strategic acquisitions alongside solid operational performance in challenging market conditions.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
89.99B
11.38%
11.91%
Gross Profit
20.20B
0.50%
6.82%
Operating Income
10.90B
9.51%
9.61%
Net Income
9.24B
17.26%
12.41%
EPS
2.14
10.31%
3.88%
Key Financial Ratios
currentRatio
1.36
grossProfitMargin
22.4%
operatingProfitMargin
12.1%
netProfitMargin
10.3%
returnOnAssets
2.01%
returnOnEquity
3.44%
debtEquityRatio
0.16
operatingCashFlowPerShare
$2.45
freeCashFlowPerShare
$1
dividendPayoutRatio
46.4%
priceToBookRatio
1.85
priceEarningsRatio
13.43
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management insights emphasized:
1. Production Strength: "In the quarter, we once again set production records from our advantage assets in Guyana and the Permian."
2. Future Growth: "...our overall market conditions were softer in the second quarter. Oil prices remained firm... expect to generate between $80 billion and $140 billion in cumulative surplus cash from 2024 to 2027."
3. Strategic Acquisition: "The integration [of Pioneer] is exceeding our expectations, and I'm confident we'll deliver even more synergies than we've announced."
"In the second quarter we delivered earnings of $9.2 billion, our second best second quarter results in the last 10 years."
— Darren Woods, Chairman and CEO
"As we look ahead, we see opportunities to grow value not only through our corporate plan period, but long into the future."
— Darren Woods, Chairman and CEO
Forward Guidance
Management highlighted the forecast for cumulative surplus cash generation expected to range from $80 billion to $140 billion from 2024 to 2027, and they pointed out continued strategic investments in high-return opportunities including their activities in low-carbon solutions. They also reaffirmed their commitment to appropriately steering capital expenditures to prioritize high-value projects and to maintain a competitive edge.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
XOM Focus
22.44%
12.10%
3.44%
13.43%
SHEL
16.00%
10.80%
1.90%
16.43%
BP
15.10%
14.90%
-0.19%
-193.14%
SU
38.20%
17.80%
3.52%
10.67%
PBR
50.00%
26.90%
-0.51%
-56.20%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Exxon Mobil's Q2 2024 results demonstrate strong fundamentals and strategic positioning for future growth. With ongoing investments in high-return projects, strong cash flow generation, and a commitment to shareholder returns, the company is well-poised for long-term value creation despite existing industry challenges. Investors should continue to monitor oil price fluctuations, integration success from acquisitions, and regulatory changes in the energy sector.
Key Investment Factors
Growth Potential
Exxon is well-positioned for growth through its strategic asset acquisitions like Pioneer and its ongoing projects in Guyana and the Permian, which are driving record production levels. Management's commitment to diverse energy technologies enhances long-term growth prospects.
Profitability Risk
Key risks include fluctuating oil prices, regulatory changes impacting the energy transition, and reliance on successful integration of newly acquired assets which can pose operational challenges.
Financial Position
Exxon's financial position remains robust, as indicated by a current ratio of 1.36 and a debt-to-equity ratio of approximately 0.161. The healthy free cash flow of $4.325 billion in Q2 2024 signifies strong operational cash-generating capacity.
SWOT Analysis
Strengths
Strong financial performance with high profit margins
Operational efficiency with record production levels
Strategic acquisitions contributing to growth
Weaknesses
Exposure to volatile oil markets
Dependence on large capital expenditures for growth
Opportunities
Growth from low-carbon technology investments
Market expansion in emerging energy sectors such as hydrogen and biofuels
Potential for operational synergies from acquisitions
Threats
Political and regulatory pressures on fossil fuel companies