ExxonMobil reported third-quarter net income of $9.07 billion, compared with $19.66 billion a year earlier. Sales also fell to $90.76 billion, below the consensus of $93.76 billion. Earnings per share, excluding exceptional items, came to $2.27, ten cents below consensus.
Justification for recent acquisitions
The Group took advantage of this publication to justify its two recent acquisitions, notably that of Pioneer Natural Resources for $60 billion. According to ExxonMobil, this transaction will increase production in the Permian Basin, enhance energy security and accelerate Pioneer’s carbon neutrality by 2035. Another acquisition, that of Denbury for $4.9 billion, aims to strengthen its Low Carbon Solutions division.
Margins and Costs in Question
Despite record production at its refineries around the world, the Group suffered from lower margins in chemicals and unfavorable impacts in derivatives. In addition, ExxonMobil announced that it had saved $9 billion on structural costs since 2019, ahead of its original schedule.
Market and Analyst Reactions
ExxonMobil’s share price fell by 2.19% following the announcement of its results. Peter McNally, analyst at Third Bridge, pointed to a weak refining result and a drop in oil and gas production for the fifth consecutive quarter. In his opinion, the acquisition of Pioneer could be a fundamental driver for ExxonMobil in the future.
ExxonMobil’s declining results and the questions surrounding its recent acquisitions highlight the challenges facing the company. As the group seeks to balance energy security needs with carbon neutrality goals, analysts and investors remain cautious about ExxonMobil’s ability to effectively execute its long-term strategy.
