Investing.com – ExxonMobil reported third-quarter income that topped expectations on Friday, as the oil major was bolstered by a jump in refining margins triggered by ongoing wars in the Middle East and Ukraine.
Adjusted earnings per share stood at $4.23 for the period, topping Bloomberg consensus estimates of $4.13.
Twin conflicts — the U.S.-Israeli war on Iran and Russia’s invasion of Ukraine — have disrupted activity at critical fuel-producing facilities, causing prices to spike.
In preliminary earnings earlier this month, ExxonMobil said higher refining margins would add around $4.5 billion to its overall results, following a boost of $4.1 billion in the preceding quarter. The returns echoed similarly solid profits at other Western oil groups, such as Shell and TotalEnergies.
Fueled by the influx of income, ExxonMobil added that it plans to pay out $4.3 billion in dividends and repurchase shares worth $5.1 billion. Shares of the company gained more than 1% in early U.S. trading.
“The stock should outperform today given an already positive group driven by continued higher oil prices,” analysts at William Blair said.
In a note, the analysts added that ExxonMobil’s 2024-2030 plan for $25 billion of earnings growth and $35 billion of cash flow expansion “remains on track,” as the firm has already achieved nearly $17 billion of cost savings.
Speaking in an interview with CNBC, CEO Darren Woods said ExxonMobil is planning to invest over $100 billion in the next few years to bolster global energy supplies.
Woods argued that a lack of available supply is the reason for high prices, adding that “the last thing you want to do is discourage more supply.”
The comments came in response to question around the potential reaction to huge windfall profits from soaring energy prices, especially ahead of next week’s American midterm elections in which affordability is likely to be a major issue for voters. Woods suggested that possible critics keep in mind that slapping penalties like windfall taxes on the oil and gas industry could constrain the ability of these businesses to fill shortfalls in production capacity.
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