Exxon Mobil Corporation (NYSE:XOM) Q1 2024 Earnings Call Transcript April 26, 2024
Exxon Mobil Corporation misses on earnings expectations. Reported EPS is $2.06 EPS, expectations were $2.2. Exxon Mobil Corporation isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good morning everyone, and welcome to Exxon Mobil Corporation First Quarter 2024 Earnings Webcast. Today’s call is being recorded. I’ll now turn it over to Ms. Marina Matselinskaya. Please go ahead.
Marina Matselinskaya : Good morning, everyone. Welcome to Exxon Mobil’s first-quarter 2024 earnings call. We appreciate you joining the call today. I’m Marina Matselinskaya, Director of Investor Relations. I’m joined by Darren Woods, Chairman and CEO, and Kathy Mikells, Senior Vice President and CFO. This presentation and prerecorded remarks are available on the Investors section of our website. They are meant to accompany the first-quarter earnings news release, which is posted in the same location. Shortly, Darren will give you an overview of our performance. Then we’ll take your questions. During today’s presentation, we’ll make forward-looking comments, which are subject to risks and uncertainties. Please read our Cautionary Statement on slide two.
You can find more information on the risks and uncertainties that apply to any forward-looking statements in our SEC filings on our website. Note that we also provided supplemental information at the end of our earnings slides, which are posted on the website. And now, please turn to slide three for Darren’s remarks.
Darren Woods: Thanks for joining us. Our strategy and the way our people are executing created significant value in the first quarter. We delivered $8.2 billion of earnings and $14.7 billion of cash flow. Even more important, we continued to strengthen the underlying earnings power of the company. An important driver of this improved earnings power is our ongoing focus on structural cost savings, which reached $10.1 billion in the quarter versus 2019, furthering our progress towards our goal of $15 billion by 2027. CapEx in the quarter was $5.8 billion as we continue to invest in advantaged growth projects that will drive future earnings and cash flow. At the same time, we further strengthened our balance sheet, bringing our net debt to capital down to 3%, the lowest in more than a decade.
To reward our shareholders, we distributed $6.8 billion in cash, including $3.8 billion in dividends. For all of 2023, Exxon Mobil was the third largest total dividend payer in the S&P 500. Only Microsoft and Apple paid more. We also repurchased about $3 billion of shares. Buybacks were temporarily paused until the shareholders of Pioneer voted on the combination of our companies, which they approved on February 7th. Post-close, we expect buybacks to ramp up to a pace of $20 billion a year. Our ongoing success this quarter reflects the intense focus we have had for the past seven years on improving every aspect of our business. We developed a strategy tied more directly to our core competitive advantages. We reorganized the company to create a group of centralized organizations that fully utilizes the significant synergies between our businesses.
We set and met ambitious plans to improve the fundamental earnings power of the company, and we established a track record of excellence in execution that is second to none. Our focus on shareholder value extends beyond the work we’re doing to drive profitable growth. I’ll give you three examples from the quarter that demonstrates how we are working to insure that the value we’ve created is not diminished through third-party actions. First, we filed for arbitration to confirm our rights and establish the value that the Chevron/Hess transaction places on the Guyana asset. This will allow us to evaluate options to maximize the value for our shareholders. Any responsible management team would do the same. Second, we’re continuing our lawsuit against two special interest activists masquerading as investors.
We’re asking the court to require the SEC’s existing rules be consistently applied in order to restore the integrity of the system. We believe the system will only work properly if the rules are clearly understood and clearly applied to all parties. And third, we successfully defended the Pioneer merger against a frivolous lawsuit designed to abuse a legitimate legal process. These actions are so common they are often referred to as a, quote, “merger tax.” In our case, however, the court ruled in our favor and sanctioned the lawyer for operating in bad faith. While the results of these efforts may not show up in any discrete quarterly result, they underpin long-term value and demonstrate our strong commitment to doing what’s right. I’ll leave you with a few key takeaways.
Our work to improve the fundamental earnings power of Exxon Mobil is continuing apace. By executing with excellence on our strategy, we expect to grow our earnings potential by an additional $12 billion from 2023 to 2027 at constant prices and margins, a growth rate of more than 10% per year. A significant driver of this earnings growth will be our delivery of additional structural cost savings totaling $15 million by 2027. In the quarter, we continued to deliver unprecedented success in Guyana with growing production creating additional value for our shareholders and the Guyanese people. Our strategic projects, which are another important driver of our planned earnings improvement, helped deliver record first-quarter refining throughput and strong performance chemicals volume growth, and there are more projects planned for startup in 2025.
All of this is without the contribution of Pioneer. With Pioneer, we’ll be positioned to drive earnings, cash flow, and shareholder distributions even higher. We continue to work constructively with the FTC as they conduct a very thorough review and remain confident that no competition issues should hinder the transaction. We‘ve been working diligently on our integration plans, and we’re ready to begin executing Day 1 on the significant synergies this combination will create. Looking beyond our plan period and into the future, we see attractive, large-scale opportunities to leverage our core capabilities in our existing businesses and in brand new markets with brand new products, something our competitors can’t do. The success of this company and our unique set of competitive advantages is built on our greatest strength and most important advantage, great people.
They are the best team in the business, able to successfully overcome any challenge. Through their work at Exxon Mobil, they are making a positive difference in the world, meeting people’s essential needs for energy and products today, and far into the future. I’m extremely proud to represent them and cannot thank them enough. Before we begin our Q&A session, I wanted to take this opportunity to introduce Jim Chapman, our new Vice President, Treasurer, and Investor Relations. Jim brings a breadth of capital market and functional experience to this role and is looking forward to working with all of you. Thank you.
Marina Matselinskaya : Thank you, Darren. Now let’s move to our Q&A session. As a courtesy to the others in the queue, we ask all our analysts to limit themselves to one question. However, please remain on the line in case we need any clarification. With that, operator, please open the line for our first question.
See also 25 Cities with Tallest Buildings in the World and 25 Richest Billionaires in Sports Industry.
To continue reading the Q&A session, please click here.