ExxonMobil's second-quarter adjusted earnings missed Wall Street's estimate even after surging 67% year over year. But record production and a jump in free cash flow let the company keep funding buybacks, cut debt, and extend its 42-year streak of dividend increases.
ExxonMobil's adjusted second-quarter earnings surged 67% to $14.7 billion, or $3.52 per share, short of the $3.60 per share analysts expected. That miss, combined with lower oil prices, has weighed on the stock and pushed its dividend yield up to around 2.7%, more than double the S&P 500's 1%. Still, the dividend itself held up where the headline profit number didn't. ExxonMobil shares were up 2.12% at $154.84.
The earnings miss dominated headlines, but it didn't tell the whole story. Exxon posted its highest upstream production in nearly two decades, excluding disruptions in the Middle East, along with record output in the Permian Basin and record diesel production. The company has also banked $16.2 billion in cumulative structural cost savings since 2019, more than all other international oil companies combined.
As a result, operating cash flow jumped from $8.7 billion in the first quarter to $23.6 billion in the second, while free cash flow ballooned to $17.2 billion. That let Exxon return $9.4 billion to shareholders, split between $5.1 billion in share repurchases and $4.3 billion in dividends — its third-highest dividend payment among S&P 500 members.
The surplus cash also let Exxon cut debt by $7 billion during the quarter, lowering its net debt-to-capital ratio to an industry-leading 11%. That leaves the dividend on firmer footing even after the earnings miss. Exxon has now raised its payout for an industry-leading 42 consecutive years.
Source: The Motley Fool
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