ExxonMobil Reports Record $15.4 Billion Profit in Q3 2023
ExxonMobil's third-quarter profits soar, driven by full-capacity refinery operations and high diesel prices.
ExxonMobil's Q3 profit more than doubled to $15.4 billion.
Gulf Coast refineries operated at full capacity, producing record diesel volumes.
Adjusted earnings from upstream operations fell to $7.3 billion amid easing crude prices.
ExxonMobil announced a remarkable profit of $15.4 billion for the third quarter of 2023, more than double its earnings from the same period last year. This surge in profits is attributed to the company's Gulf Coast refineries operating at full capacity, alongside soaring diesel prices that have significantly boosted refining margins.
The company reported earnings of $3.72 per share, surpassing Wall Street's expectations of $4.08, with adjusted earnings reaching $4.23 per share. This quarter marks one of the most profitable periods in Exxon's history, with adjusted net income hitting $17.5 billion. The energy products segment alone generated an adjusted profit of $9.05 billion, a notable increase from $4.1 billion in the previous quarter.
The backdrop of rising global fuel demand, exacerbated by geopolitical tensions such as the Iran war and the conflict in Ukraine, has disrupted about 10% of the world's refining capacity. This situation has left the remaining refineries struggling to meet the high demand for diesel and other fuels, allowing Exxon to capitalize on the increased refining margins. The company's Gulf Coast distillate output has surged by approximately 40% since 2019, bolstered by a $2 billion expansion of its Beaumont refinery completed in 2023, which added 250,000 barrels per day of processing capacity.
Despite the impressive performance in refining, Exxon's upstream business faced challenges, with adjusted earnings dropping to $7.3 billion from $9.2 billion in the second quarter due to a decline in crude prices. The company maintained production levels near 4.5 million barrels of oil equivalent per day. Exxon also generated $25.7 billion in operating cash flow and returned $9.4 billion to shareholders through dividends and stock buybacks, including $5.1 billion in repurchases. Notably, this marks the 44th consecutive year that Exxon has increased its dividend.
Looking ahead, ExxonMobil faces challenges in increasing production further, as its Gulf Coast refineries are already at full capacity. The ongoing constraints in global diesel supplies, particularly due to refinery damage in the Middle East and Russia, will likely continue to impact the market, even as crude shipments from the Persian Gulf begin to recover.
