ExxonMobil (XOM) has hit it out of the park with its second-quarter earnings, beating expectations thanks to record production in Guyana and the Permian Basin. The oil giant reported its second-highest results for the past decade, giving investors something to smile about.
ExxonMobil Beats the Street
ExxonMobil’s Q2 earnings per share came in at $2.14, topping analysts’ expectations of $2.11. Revenue was also impressive, hitting $93.06 billion and outpacing analysts’ forecasts of $90.99 billion. This marks a significant increase from last year’s $82.91 billion.
“If you look at the oil that we produced in the second quarter, it is the highest level we produced since Exxon and Mobil merged,” CEO Darren Woods proudly told CNBC’s “Squawk Box.” That’s saying something, considering the merger happened way back in 1999.
XOM’s Boost from Pioneer Deal
One of the quarter’s highlights was the contribution from the Pioneer Natural Resources acquisition, which closed in May. This deal added a cool $500 million to Exxon’s earnings, showcasing the immediate impact of strategic acquisitions. Capital and exploration expenditures for the quarter totaled $7 billion, with $700 million tied to the Pioneer deal, bringing year-to-date spending to nearly $13 billion.
ExxonMobil’s Record Production
Production was up by 15% from the first quarter, hitting a whopping 4.4 million barrels per day. This surge was fueled by record outputs in both Guyana and the Permian Basin. ExxonMobil’s acquisition of Pioneer Natural Resources, valued at nearly $60 billion, closed during the quarter, and the company said it contributed an estimated $500 million to its earnings during May and June.
XOM’s Shareholder Returns and Future Outlook
ExxonMobil didn’t forget about its shareholders, returning $9.5 billion in the quarter, including $4.3 billion in dividends and $5.2 billion in share buybacks.
Looking ahead, Exxon expects to spend $28 billion on capital for the year, indicating that the company is not slowing down anytime soon.
In short, ExxonMobil’s latest quarter was one for the books, with record production levels and strong financial performance.
Is XOM Stock a Buy, Sell or Hold?
Analysts remain cautiously optimistic about XOM stock, with a Moderate Buy consensus rating based on 11 Buys and six Holds. Over the past year, XOM has increased by 14%, and the average XOM price target of $135.15 implies an upside potential of 16.9% from current levels. These analyst ratings are likely to change following XOM’s results today.
