ExxonMobil Published a Lackluster Quarterly Earnings Report Reflecting Sluggish Oil Market and Excess Costs and Charges

ExxonMobil (XOM) Q4 U.S. GAAP earnings fell to $7.63 billion (or $1.91 per share) from $12.75 billion (or $3.09 per share) in the same period last year. Total revenue fell 11.6% YoY to $84.34 billion, well below the level in the same period last year. As noted in the Upstream Production report, the Wall Street consensus was essentially flat, with energy products sales down 1.2%.

Importantly, ExxonMobil recorded a $2.3 billion impairment charge in the quarter, primarily due to impairments on decommissioned oil rigs at its Santa Ynez, California, plant due to regulatory challenges that hampered the restart of manufacturing and distribution facilities.

Driven by growth in the Permian Basin and Guyana, net production in the reporting quarter was basically flat annually and increased 3.5% QoQ to 3.8 million barrels of oil equivalent per day; the company's third project in Guyana, Payara, was put into production ahead of schedule in November, with Production 1 having reached the target production capacity of 220,000 barrels per day in mid-month.

Additionally, ExxonMobil's Q4 operating cash flow was $13.7 billion and free cash flow was $8 billion; full-year cash increased by $1.9 billion, with free cash flow reaching $36.1 billion. Capital and exploration spending totaled $7.8 billion in the quarter, bringing fiscal 2023 spending to $26.3 billion, just above the upper end of guidance, as the company accelerated activity at its Permian and Guyana assets and entered new lithium operations.