ExxonMobil achieved a profit of $15.4 billion in the third quarter of 2023, more than double the $7.9 billion profit from last year. This profit increase is primarily due to the full performance of Gulf Coast refineries and rising diesel prices.
Financial Performance and Refinery Capacity
The company earned $3.72 per share and $4.23 on an adjusted basis, exceeding Wall Street's forecast of $4.08. Adjusted net income reached $17.5 billion, marking one of the most profitable quarters in ExxonMobil's history. The company's energy products segment achieved an adjusted profit of $9.05 billion in this quarter, a significant increase from $4.1 billion in the second quarter.
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Industry Challenges and Production Constraints
ExxonMobil's refinery units on the Gulf Coast operated at 100% capacity and recorded the second-highest diesel production volume in their history. The war in Iran and attacks in Ukraine on Russian refineries have resulted in about 10% of global refining capacity being sidelined, leading to a shortage of diesel and other fuels in the market. Refining margins have significantly increased, and ExxonMobil has capitalized well on this situation.
The company has also increased its fuel production. Diesel production on the Gulf Coast has risen by approximately 40% since 2019, thanks to the development of the Beaumont refinery, valued at $2 billion, which was completed in 2023. This project added 250,000 barrels per day to processing capacity, approved years before the current fuel shortage.
Meanwhile, ExxonMobil's upstream business performed less in this quarter. Adjusted income fell from $9.2 billion in the second quarter to $7.3 billion as oil prices decreased. Production was maintained at nearly 4.5 million barrels of oil equivalent per day. During this period, ExxonMobil generated $25.7 billion in operating cash flow and returned $9.4 billion to shareholders through dividends and stock buybacks. The company has also increased its dividends for 44 consecutive years and announced plans to repurchase another $20 billion in shares by 2027.
Given that ExxonMobil's Gulf Coast refineries are currently operating at full capacity, further production increases will be challenging without additional investment. While oil shipments from the Gulf are returning, global diesel supply remains constrained due to refinery damages in the Middle East and Russia.
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