ExxonMobil Holdings Corporation (NYSE: XOM) reported third-quarter adjusted earnings of $4.23 per share on Friday, ahead of the $4.08 analysts had expected, according to LSEG data, as refining profit more than doubled from the second quarter and offset weaker results from oil and gas production.
Adjusted earnings rose to $17.5 billion from $14.7 billion in the second quarter, above the $16.6 billion analysts had forecast. Net income under U.S. GAAP was $15.4 billion, or $3.72 per share, compared with $14.5 billion, or $3.48 per share, three months earlier.
The results come as fighting in the Middle East, including the U.S.-Israeli war on Iran, and Ukrainian strikes on Russian refineries have knocked out fuel-making capacity and caused global diesel shortages. Higher fuel prices have lifted profits across Western oil majors, and Shell and TotalEnergies also reported higher-than-expected earnings on Thursday.
"Advantaged investments, technology, and $16.9 billion in structural cost savings since 2019 are expanding our earnings power. These are lasting improvements, not simply the result of favorable prices and margins," Darren Woods, ExxonMobil chairman and chief executive officer, said in the earnings release.
#Refining Earnings More Than Double as Gulf Coast Plants Run at Full Capacity
Adjusted earnings from Energy Products, the segment that includes refining, rose to $9.1 billion from $4.1 billion in the second quarter. The company attributed the gain to higher margins and strong operations, including 100% crude unit utilization at its U.S. Gulf Coast refineries, meaning they processed crude at full capacity.
ExxonMobil said Gulf Coast diesel output was the second-highest on record. It also reported record year-to-date refining performance, including its highest global diesel yield and highest North American diesel volumes, based on internal data available from 2014.
Woods pointed to earlier spending on distillates, the fuel category that includes diesel. "On the U.S. Gulf Coast, investments such as our Beaumont refinery expansion have contributed to an increase in our distillate production by approximately 40% since 2019," he said.
#Oil and Gas Production Profit Falls 20% on Lower Crude Prices
Adjusted Upstream earnings, which come from oil and gas production, fell to $7.3 billion from $9.2 billion. The company cited lower prices and an accelerated Guyana entitlement impact, which affects the share of output it receives under its contract there. Production was roughly flat at about 4.5 million barrels of oil equivalent per day.
ExxonMobil has a higher share of production in the Middle East than its rivals. Its year-to-date results include $921 million of Middle East impacts, which the company excluded from adjusted earnings.
During the quarter, the company took over as operator of the Papua LNG project in Papua New Guinea and reached agreements to increase its working interests to 34% in Papua LNG and 50% in Rovuma LNG in Mozambique, where it was already the operator. Last month it signed an agreement to explore for and produce shale in Azerbaijan, and it has held talks about a possible return to Venezuela.
Chemical Products adjusted earnings fell to $725 million from $1.2 billion as margins declined. Specialty Products rose to $1.3 billion from $969 million on higher basestock margins, the base oils used to make lubricants.
The gap between reported and adjusted earnings mainly reflects $2.5 billion of negative timing effects, which the company said relate largely to derivatives valued at period-end prices before the linked physical shipments are booked. A $675 million gain on asset sales partly offset that.
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#ExxonMobil Sets $20 Billion Buyback Plan for 2027 and Extends Dividend Increases to 44 Years
Cash flow from operations was $25.7 billion and free cash flow was $19.1 billion. The company returned $9.4 billion to shareholders, including $4.3 billion in dividends and $5.1 billion in share repurchases.
ExxonMobil announced $20 billion of share repurchases for 2027, the same amount as in 2026, which it said assumes reasonable market conditions. It declared a fourth-quarter dividend of $1.07 per share, payable Dec. 10 to shareholders of record on Nov. 16, and said annual dividends have risen for 44 consecutive years.
Net debt stood at $22.1 billion at Sept. 30, after a reduction of nearly $11 billion this year. The company also started up carbon capture and storage, which traps carbon dioxide and stores it underground, for steelmaker Nucor, and received approval for its Rose carbon storage project.
Woods said markets will change but that the company is positioned to keep supplying energy and products while growing long-term value. ExxonMobil said its plans remain exposed to shifts in supply and demand, geopolitical conflict and disruption to shipping routes, changes in taxes and regulation, including additional European energy taxes, and the timely completion of projects.