Exxon Mobil (NYSE:XOM) Reports Strong Earnings in the Third Quarter of 2014

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By Thomas Copeland on October 31, 2014 Technology & Software

On Friday before opening of the US markets, the third quarter results of Exxon Mobil Corp (NYSE:XOM) were made public declaring $107.5 billion of revenue and $1.89 in earnings per share. The estimated figures given by Thomson Reuters were $105.51 billion in revenues and $1.71 in earnings per share, so the results are far better than predicted. If we compare the third quarter results of last year, Exxon was able to make revenues of $112.37 billion and posted $1.79 in earnings per share.

It is worth mentioning here that three months back Exxon (NYSE:XOM) was hopeful for per share earnings of $1.93 for the third quarter. The results however were not as expected and earnings per share of $1.71 for quarter ending Sep 30 recorded an 11 percent decline. As compared to last year’s third quarter this year net income registered a 3 percent or $200 million increase and stood at $ 8.07 billion. Exxon was able to counter the declining revenues from decreasing oil prices and production through strong refining operations. Exxon spent $ 3 billion in third quarter in order to reduce outstanding shares when it purchased 30 million shares of common stock for the treasury.

Third quarter earnings report of Exxon (NYSE:XOM) provided many other vital statistics. Statistics like production was 3.831 million BOE/Day, operating cash flow was $12.4 billion, U.S. downstream net was $460 million. International downstream net was $564 million, International upstream net was $5.16 billion, U.S. upstream net was $1.26 billion, oil-equivalent production declined by 4.7 percent, capital expenditures were $9.84 billion and dividends per share increased by 9.5 percent to $0.69.

Commenting on the results of third quarter, Exxon Chairman Rex Tillerson informed that increase of 3 percent in Exxon’s (NYSE:XOM) earnings in the third quarter from corresponding quarter of 2013 was mainly due to higher margins and superior performance in the downstream and chemical businesses. This to some extent has balanced the effect of lower upstream realization. He further reiterated that strength of Exxon Mobil’s integrated business model has been exhibited by this quarterly result. Required immunity against the market variations over the business cycle has been achieved at Exxon Mobil through a comprehensive integration between Upstream, Downstream and Chemical businesses. This gave them viable advantage in scale, efficiency, technical and commercial capabilities. During the first three quarters of year 2014, cash collections from asset sales and operations were able to completely cover net investments and share holder distributions.

Rex Tillerson also pledged that the corporation would continue to fulfill all milestones related to operations and project development. In 2014, Upstream production remained at par with last year’s estimate of 4 million oil equivalent barrels per day due to the fact that Exxon (NYSE:XOM) continued to include latest production from project startups.

On Thursday, Exxon’s shares closed at $94.45 registering a drop of 0.15 percent, however, the initial reaction in the premarket was good after the release of earnings report with share price of $96.20 showing almost 2 percent rise. In addition, market capitalization of Exxon (NYSE:XOM) is almost $402 billion.