Exxon reports $4.7 billion in second-quarter profit as demand for fuel recovers

Exxon posts $4.7B in Q2 profit as demand for fuel rebounds

Exxon shareholders recently shook up the company’s board, voting to replace three of its 12 members with directors they said were better equipped to guide the oil giant through a transition to cleaner energy. In a conference call with investors Friday, CEO Darren Woods began his remarks by acknowledging changes within Exxon, saying the company has been meeting with the new directors, and many of his remarks throughout the call were focused on climate-related initiatives.

Exxon reported Friday that it earned $4.69 billion, or $1.10 per share, in the April-June quarter after reporting a loss in the same period last year during the mass shutdowns intended to limit the spread of the coronavirus. On top of dealing with volatile energy prices, oil and gas companies are increasingly facing pressure from investors to shift to cleaner energy sources to slow climate change. “We’re stepping up and accelerating efforts to ensure the company plays a meaningful role in the energy transition,” Woods said. “Our plans will reflect the continued development and deployment of needed technologies.”

Woods touted Exxon’s plans to expand its carbon capture and storage facility in Wyoming and its work developing lower-emission fuels. He also said the company has been reducing methane emissions and using flyover technology to detect methane leaks in the Permian Basin. Exxon also signed on to invest in a carbon capture and storage project in Scotland that aims to capture and store 5 million to 6 million metric tons of carbon dioxide annually by 2030. It would take many such projects to make a dent in emissions generated by the oil and gas industries. Last year, Exxon alone emitted 112 million metric tons of carbon dioxide. That doesn’t count the emissions generated when its customers use its products.

Nevertheless, the plan has strong points and “you’ve got to start somewhere,” said Peter McNally, global sector lead at Third Bridge. “The North Sea, in general, is a good place to do carbon capture. You have favorable geology and a government that’s behind it.” Exxon’s profits in the second quarter easily topped the $1.02 per share that Wall Street was looking for, according to a survey by Zacks Investment Research. Revenue at the Irving, Texas, company was $67.74 billion, roughly double last year during the same period, and also better than the expectation of $63.73 billion from industry analysts.

Exxon produced the equivalent of 3.6 million barrels of oil per day in the second quarter, down 2% from the second quarter of 2020 due to increased maintenance activity, the company said. In the Permian Basin, Exxon’s oil production rose to 400,000 barrels per day, up 34% from the same quarter last year. Its chemical business delivered earnings of $2.3 billion, its best quarter in the company’s history. Its refineries lost money, due to suppressed demand for jet fuel, but didn’t lose as much as last year. “At least it’s moving in the right direction, if not all the way back to green territory,” said Stewart Glickman, energy analyst at CFRA. “Crude oil prices have really come off the mat, obviously, and that is helping a lot.”

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