The Zhitong Finance App learned that ExxonMobil (XOM.US) recently released its first quarter results report. Despite a decline in adjusted net profit, the company is still full of hope for the future. Here's a detailed analysis of the quarter's results and why investors should take a holistic view of the company's development.

First quarter results details

Affected by falling gas prices and refining profits, ExxonMobil's adjusted net profit for the first quarter fell 29% year over year to US$8.2 billion, or US$2.06 per share, slightly lower than analysts' unanimous expectations of US$2.19 per share.

Compared with the same period last year, natural gas prices and refining profits were historically high, but have now returned to normal levels. ExxonMobil CEO Darren Woods pointed out that despite this, the company showed “strong quarterly results,” and emphasized the continued growth of quality assets such as Guyana.

According to information, Guyana's production has exceeded expectations and achieved a total quarterly output of more than 600,000 barrels of oil equivalent per day (BoE/d), partly because the Payara development project reached production ahead of schedule. Additionally, ExxonMobil has approved a sixth major development project and continues to discover more oil.

At the same time, ExxonMobil's product solutions business also performed steadily. The company's sales of high-performance chemicals increased, and refining production reached a record high in the first quarter.

A bright future

ExxonMobil invested nearly $6 billion in capital and exploration projects in the first quarter, laying the foundation for future growth. The company's strategy will enhance profitability by investing in high-quality assets, producing high-value products, and reducing structural costs. Up to now, the company has achieved cost savings of $1.01 billion, with a goal of cumulative savings of $15 billion by 2027.

ExxonMobil plans to drive profit growth by expanding its operations in regions such as Guyana, the Permian Basin, and Brazil. In Guyana, the company's new development project Whiptail will be launched in 2027, increasing production capacity by approximately 250,000 barrels of oil equivalent per day. Meanwhile, the company plans to complete the Yellowtail project next year and the Uaru project in 2026.

In the Permian Basin, the company has also made significant investments, including a proposed $64.5 billion deal to acquire Pioneer Natural Resources (PXD.US), which will double ExxonMobil's production in the region to 1.3 million barrels of oil equivalent per day, and is expected to reach 2 million barrels of oil equivalent per day by 2027.

The strategy is expected to more than double ExxonMobil's profit from its 2019 benchmark level by 2027. Currently, the company has met half of its goals.

Giving back to shareholders

As earnings grew, ExxonMobil was able to give back more cash to shareholders. In the first quarter, the company distributed $6.8 billion, including $3.8 billion in dividends and $3 billion in share repurchases. As the deal with Pioneer Natural Resources has yet to be completed, the company temporarily suspended share repurchases, but once the deal is completed, the repurchase rate is expected to accelerate to $20 billion per year. Furthermore, the company plans to continue increasing its dividend and has now been growing for 41 consecutive years.

summed

Although ExxonMobil's earnings declined in the first quarter due to falling gas prices and refining profits, the future prospects are still bright. The company's strategy will generate an additional 50% profit growth and give back to shareholders through dividends and share repurchases, and its robust balance sheet, making ExxonMobil one of the most attractive and low-risk investment choices in the energy industry.