As ExxonMobil Corp (XOM) prepares to unveil its third-quarter earnings on Friday morning, investors are eagerly anticipating insights into the company’s ongoing production growth trajectory, particularly from its high-output assets in the Permian Basin and Guyana. This focus stems from the company’s recent successes in bolstering production levels and implementing cost-saving initiatives designed to enhance profitability. Despite mixed sentiment in the second quarter, Exxon’s financial resilience and strategic cost controls have positioned it for another strong quarter, with potential for continued production growth and earnings increases.
Production Momentum and Financial Strength
In the second quarter, Exxon reported total revenues of $93.06 billion, surpassing the consensus estimate of $90.987 billion. This growth was driven by rising production levels, particularly within its newly acquired Pioneer Natural Resources assets, its operations in Guyana, and its long-standing presence in the Permian Basin. Net production reached an impressive 4,358 thousand oil-equivalent barrels per day, representing a 15% sequential increase. Investors are likely to see continued momentum in the third quarter due to Exxon’s enhanced focus on high-value, low-cost assets, which have not only driven production but also yielded improved cost efficiencies.
Exxon’s adjusted net profit in the second quarter was $9.24 billion, reflecting an increase from $8.22 billion in the prior quarter and exceeding analysts’ expectations. With adjusted earnings per share of $2.14, above the $2.01 consensus, Exxon demonstrated its ability to outpace market expectations amid fluctuating commodity prices. Despite the challenging macro environment, the company’s performance was enhanced by strategic investment in high-output assets and cost-control measures that help stabilize earnings potential. For the full year, Exxon has guided for approximately $28 billion in capital expenditures, including investments in its expanded portfolio following the Pioneer acquisition.
Shareholder Returns and Capital Allocation
Another key factor influencing Exxon’s third-quarter earnings potential is the company’s aggressive shareholder return strategy. Year-to-date shareholder distributions reached $16.3 billion by the second quarter, which included $8.1 billion in dividends and $8.3 billion in share repurchases. The pace of share repurchases has accelerated to a target of $20 billion annually through 2025, contingent on market conditions. This capital return plan, combined with the sustained dividend (most recently $0.95 per share in the second quarter), underscores Exxon’s commitment to returning value to its investors even as it reinvests in growth and sustainability. For the third quarter, Exxon’s capital distribution could be an additional positive driver for shareholder sentiment, as the company’s financial structure remains robust enough to accommodate both high-level reinvestments and substantial shareholder returns.
Investing in ExxonMobil
With ExxonMobil’s strong track record of production growth, cost management, and shareholder returns, investors are likely to be closely watching the company’s third-quarter earnings report. If you are interested in participating in the market for ExxonMobil, you can buy shares through a brokerage account. Many brokerages allow you to buy “fractional shares,” which allows you to own portions of stock without buying an entire share. For example, with Exxon Mobil trading at $117.41 as of publishing time, $100 would buy you 0.85 shares of stock.
If you are looking to bet against ExxonMobil, you will need to utilize options trading. You can either buy a put option or sell a call option at a strike price above where shares are currently trading. Both strategies allow you to profit from a decline in the share price. However, options trading involves a higher level of risk and complexity and is generally recommended for experienced investors.
