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Exxon Stock Rises As Earnings Beat, Oil Major Shakes Up Reporting Structure

Exxon Mobil (XOM) reported fourth-quarter earnings that topped Wall Street estimates before the market opened Tuesday.




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Estimates: FactSet analysts projected Exxon earnings soaring to $1.95 per share from just three cents in the year-ago quarter. Revenue was expected to nearly double to $85.1 billion.

Results: Exxon earnings per share of $2.05 on revenue of $85 billion. Revenue of $84.97 billion was up more than 82%, but just short of consensus views.

Capital spending rose to $5.8 billion, in line with guidance. Cash flow from operations hit $48 million, the highest level since 20212, according to the company.

Oil-equivalent production was 3.8 million barrels per day, up 2% year-over-year. Permian production volumes rose by nearly 100,000 bpd, on increased capital efficiency

Exxon sees capital spending of $21 billion to $24 billion for 2022, vs. $16.6 billion in 2021. The company initiated a $10 billion share repurchase program.

Stock: Shares rose 1.8% to 77.30 in premarket trading on the stock market today. Exxon stock broke out of a cup base with a 66.48 entry point on Jan. 5, according to MarketSmith chart analysis It is now extended and out of buy range.

The recent stock action marks another step in its recovery since last year when oil collapsed. That led to Exxon stock losing its status as a Dow Jones Industrial Average listing after 90 years.

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Exxon Stock Streamlines Operations Amid Rising Oil Prices

Exxon announced Monday it would reorganize into three business units, combining its chemicals and refining divisions into a singe reporting segment, in order to cut costs. The change will take place April 1. And the company plans to relocate its headquarters from Irving, Texas, to Houston by mid-2023.

The strategy is the most recent, and largest, maneuver in Exxon’s effort to cut $6 billion from its annual costs, using 2019 spending as its baseline.

A company statement said the oil giant’s three reporting units will include upstream, product solutions and low carbon. Upstream will involve production or oil and gas. Product solutions will refine and manufacture fuels and chemicals.

The low-carbon unit, for now, involves the company’s carbon capture and sequestration efforts. The unit has been exploring the concept of multi-user CCS “hubs” in industrial areas located near geologic storage sites, such as depleted oil and gas reservoirs.

“We believe the time is right for a large-scale collaboration in the United States between government at every level, private industry, academia and local communities to create an “Innovation Zone” approach to dramatically accelerate CCS progress,” ExxonMobil Low Carbon Solutions President Joe Blommaert said in a post at the company’s EnergyFactor blogsite.

Climate Concerns

The moves underscore that issues associated with climate change will likely continue to be front and center for investors.

On Jan. 18, the oil giant pledged to have net-zero carbon emissions from operations by 2050. But the pledge didn’t include emissions from consumers using oil and other fossil fuels.

The pledge comes after Engine No. 1 gained seats on Exxon’s board last year, working to force the oil major to take a more proactive approach to climate change, which the activist investor believes will have major ramifications for Exxon stock.

Chevron reported mixed Q4 results on Friday, despite oil prices hitting a seven-year high during the quarter. Demand uncertainty remains amid the spread of the omicron Covid-19 variant and is a major headwind to the oil price outlook.

Royal Dutch Shell (RDSA) earnings are scheduled for Feb. 3. BP (BP) will report on Feb. 8. U.S. exploration and production companies are also on tap in early February.

In other oil stocks news, OPEC+ is meeting Wednesday to determine its output for March. Russia, which has joined the Organization of the Petroleum Exporting Countries in forming OPEC+, is amassing troops at the border with Ukraine, adding to market uncertainty.

As with other oil stocks to buy and watch, Exxon stock typically rises and falls with crude oil prices. So even when Exxon stock looks good based on fundamentals and technical factors, crude oil prices may suddenly plunge, taking the stock down too.

Follow Gillian Rich on Twitter for energy news and more.

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