Exxon Mobil posted record annual profits in 2022 as Americans struggled with high prices for gasoline, home heating and consumer goods.
The Irving-based oil giant brought in $12.75 billion in profits in the fourth quarter, bringing annual profits to $55.7 billion. That exceeded Exxon’s previous annual record of $45.22 billion in annual profits Exxon set in 2008, when a barrel of oil soared close to $150.
Exxon brought in $95.43 billion in revenue during the fourth quarter. Its third-quarter profit was the highest in the company’s 152-year history.
Recovering demand and tight energy supplies helped boost profit, the company said.
“While our results clearly benefited from a favorable market, the counter-cyclical investments we made before and during the pandemic provided the energy and products people needed as economies began recovering and supplies became tight,” said CEO Darren Woods. “We leaned in when others leaned out.”
Exxon achieved its best-ever annual refining throughput in North America and the highest globally since 2012, the company said. It mechanically completed the expansion of its Beaumont Refinery in Texas and expects to bring 250,000 barrels per day of crude oil distillation capacity to the market in first quarter of this year.
But investors looking past the top-line numbers were disappointed the company failed to announce plans to funnel more of that windfall into additional share repurchases. The stock fell almost 4% in pre-market U.S. trading.
Exxon’s results Tuesday followed those of rival Chevron Corp., which posted a surprise earnings miss last week just days after announcing a mammoth $75 billion share-buyback program.
The five so-called supermajors are swimming in cash after a record 2022 but pressure is mounting on executive teams to satisfy competing demands: investor appetite for bigger payouts and buybacks versus political outrage over windfall profits during a time of war and economic dislocation.
Chevron was excoriated by the White House and Democratic members of Congress when it disclosed plans last week to funnel $75 billion to investors in the form of stock repurchases.
Exxon expanded buybacks multiple times last year and already has signaled its intention to repurchase $50 billion of stock through 2024.
There are also signs that Wall Street, after a long hiatus, is once again keen to see oil explorers increasing crude output. Chevron executives faced multiple questions about growth plans last week, and several analysts noted their disappointment at the California-based company’s outlook for a flat-to-3% increase this year. A slowdown in Chevron’s Permian Basin annual growth to 10% probably will be an “overhang” on the stock, Cowen & Co. said in a note to clients.
That said, Exxon has less reason to be concerned about when it comes to growth than some of its peers. The company has a “differentiated upstream project queue” that should increase return on capital over the coming years, Goldman Sachs wrote in a Jan. 20 note.
It has continued to invest in major projects in Guyana and the Permian region during the pandemic, which by Exxon’s own estimates should have the knock-on effect of driving production to the equivalent of more than 4 million barrels a day by 2027, up about 8% from current levels.
Alongside fossil-fuel growth, Exxon plans to ramp up spending on clean-energy investments by focusing on carbon capture, hydrogen and biofuels.
The company cited the Biden administration’s Inflation Reduction Act as a key policy pillar that improves profitability of decarbonizing existing operations, but has said that more government support is needed for big projects such as its proposal to capture emissions from industrial facilities along the Houston Ship Channel.
The Associated Press and Bloomberg contributed to this story.
