Exxon Stock Gains as Smashes Western Oil Majors' Earnings Record With $59 Billion Profit
$Exxon Mobil Corp(XOM)$ posted $59 billion in adjusted profit for 2022, the company said on Tuesday, taking home more than $6.7 million per hour last year, and setting not only a company record but a historic high for the Western oil industry.
Exxon Mobil shares rose nearly 1% in morning trading.Oil majors are expected to break their own annual records on high prices and soaring demand, pushing their combined take to near $200 billion. The scale has renewed criticism of the oil industry and sparked calls for more countries to levy windfall profit taxes on the companies.
Exxon's results far exceeded the then-record $45.2 billion net profit it reported in 2008, when oil hit $142 per barrel, 30% above last year's average price. Deep cost cuts during the pandemic helped supercharge last year's earnings.
"Overall earnings and cashflow were up pretty significantly year on year," Exxon Chief Financial Officer Kathryn Mikells told Reuters. "So that came really from a combination of strong markets, strong throughput, strong production, and really good cost control."
Exxon said it incurred a $1.3 billion hit to its fourth quarter earnings from a European Union windfall tax that began in the final quarter and from asset impairments. The company is suing the EU, arguing the levy exceeds its legal authority.
The results may set up another confrontation with the White House. On Friday, President Joe Biden's administration blasted oil firms for pouring cash into shareholder payouts rather than production.
Exxon boasted its cash flow from operations soared to $76.8 billion last year, up from $48.1 billion in 2021.
Windfall profit taxes are "unlawful and bad policy," countered Mikells. Slapping new taxes on oil earnings "has the opposite effect of what you are trying to achieve," she said, adding it would discourage new oil and gas production.
Exxon posted $14 billion in fourth quarter profit excluding charges, 60% more than the same period last year but down almost 25% from the previous quarter as oil prices eased and some operations suffered from cold-weather related outages.
Adjusted fourth quarter per share profit was $3.09 per share, below the $3.32 per share forecast by Zacks Financial.
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