Exxon Mobil $XOM Stock Up On $10 Billion Share BuyBack

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XOM stock is ripping higher in early trading on February 1, 2022, after the company reported record revenue and a $10 billion share buyback program.

ExxonMobil Earns $23 Billion in 2021, Initiates $10 Billion Share Repurchase Program

Exxon Mobil Corporation today announced fourth-quarter 2021 earnings of $8.9 billion, or $2.08 per share assuming dilution, resulting in full-year earnings of $23 billion, or $5.39 per share assuming dilution. Capital and exploration expenditures were $5.8 billion in the fourth quarter and $16.6 billion for the full year 2021, in line with guidance.

Exxon Mobil reported Q4 ex-items EPS of $2.05 versus the consensus estimate of $1.93. The company reported Q4 revenue of $84.97B versus the consensus estimate of $91.85B.

“Our effective pandemic response, focused investments during the down-cycle, and structural cost savings positioned us to realize the full benefits of the market recovery in 2021,” said Darren Woods, chairman and chief executive officer. “Our new streamlined business structure is another example of the actions we are taking to further strengthen our competitive advantages and grow shareholder value. We’ve made great progress in 2021 and our forward plans position us to lead in cash flow and earnings growth, operating performance, and the energy transition.”

Highlights:

  1. Generates $48 billion of cash flow from operating activities, the highest level since 2012, more than covering capital investments, debt reduction, and dividend
  2. Reduces structural costs by an additional $1.9 billion, increasing total savings to nearly $5 billion versus 2019
  3. Strengthens balance sheet to pre-pandemic levels by paying down $20 billion in debt
  4. Expects to achieve 2025 emission-reduction plans four years ahead of schedule
  5. Aims to achieve net zero Scope 1 and 2 greenhouse gas emissions for operated assets by 2050, with plans to achieve net zero in the Permian Basin by 2030

ExxonMobil Streamlines Structure to Enhance Effectiveness, Grow Value, Reduce Costs

On January 31, 2022, ExxonMobil said it is further streamlining its business structure by combining chemical and downstream companies and centralizing technology and engineering, and other support services, to better support customers, enhance performance and grow value.

“Our transformed business structure enables us to more fully leverage the corporation’s scale, integration, technology advantages, and the skills and capabilities of our talented workforce, to better serve our customers,” said Darren Woods, chairman and chief executive officer.

“Aligning our businesses along market-focused value chains and centralizing service delivery, provides the flexibility to ensure our most capable resources are applied to the highest corporate priorities and positions us to deliver greater shareholder returns.”

Effective April 1, the company will be organized along three business lines – ExxonMobil Upstream Company, ExxonMobil Product Solutions and ExxonMobil Low Carbon Solutions. They will be supported by a single technology organization, ExxonMobil Technology and Engineering, and other centralized service-delivery groups providing like capabilities, building on the successful consolidation of major projects across the corporation in 2019.

The move is a further evolution of the company’s business model and part of its strategy to build globally competitive businesses that lead industry in earnings and cash flow growth, operating performance and the energy transition.

ExxonMobil is on track to exceed $6 billion in structural cost savings by 2023, compared to 2019, driven by savings from the new business structure and measures such as centralizing procurement, digital transformation of processes, and right-sizing programs that were announced in 2020.

The new ExxonMobil Product Solutions Company will engineer, manufacture and deliver products needed by modern society at an industry-leading scale, serving multiple segments, products and markets. It will play a critical role in reducing greenhouse gas emissions and plastic waste by developing more sustainable products such as:

  1. Lower-emissions fuels to help decarbonize commercial transportation, including aviation and marine.
  2. Chemical performance products that enable customer emissions reductions in applications in the agriculture, health and renewable energy sectors.
  3. Next-generation lubricants and plastics that improve efficiency for traditional and electric vehicles.
  4. Certified circular polymers that bring new life to plastic waste through advanced recycling.
  5. ExxonMobil Product Solutions will be the market leader in sales of polyethylene and other high-value chemical products and hold the No. 2 market position in aromatics, lubricants and fuel additives.

Karen McKee, formerly president of ExxonMobil Chemical Company has been appointed to lead ExxonMobil Product Solutions.

ExxonMobil Technology and Engineering will integrate technology activities, improving value delivery through centralized management of technical capabilities tightly linked to business priorities.

Priorities include developing new technologies to significantly lower the cost of scope 1, 2 and 3 emissions reductions; reducing greenhouse gas emissions at the asset level; increasing production yields and revenue; developing high-value differentiated products for customers; and improving advanced recycling of plastic waste.

Linda DuCharme, formerly president of ExxonMobil Upstream Integrated Solutions and ExxonMobil Upstream Business Development, has been appointed to lead ExxonMobil Technology and Engineering Company.

This change will also consolidate the Upstream into a single organization, ExxonMobil Upstream Company, which will be led by Liam Mallon, formerly president of ExxonMobil Upstream Oil and Gas Company.

To further collaboration and integration, the company said it will relocate its corporate headquarters from Irving, Texas, to its campus north of Houston. The move, which will be completed mid-year 2023, will enable closer teamwork to accelerate and increase value delivery through company-wide approaches.

“We greatly value our long history in Irving and appreciate the strong ties we have developed in the North Texas community,” said Woods. “Closer collaboration and the new streamlined business model will enable the company to grow shareholder value and position ExxonMobil for success through the energy transition.”

📺 Exxon Mobil CEO Woods on Q4 earnings, relocating headquarters to Houston

Exxon Mobil CEO on Q4 earnings, relocating headquarters to Houston

📉 XOM Stock Technical Analysis

Xom Stock

Both the short-term and long-term trends are positive. This is a very positive sign. XOM is part of the Oil, Gas & Consumable Fuels industry. There are 403 other stocks in this industry. XOM outperforms 75% of them. A new 52 week high is currently being made by XOM, which is a very good signal! Especially since the S&P500 is only trading in the upper part of its 52-week range, so XOM is leading the market. Volume is considerably higher in the last couple of days.

There is a support zone ranging from 75.95 to 75.97. This zone is formed by a combination of multiple trend lines in multiple time frames. There is a support zone ranging from 71.34 to 72.17. This zone is formed by a combination of multiple trend lines and important moving averages in the daily time frame. There is also support at 63.28 from a trend line in the weekly time frame. Finally, there is a support zone ranging from 60.67 to 61.61. This zone is formed by a combination of multiple trend lines in the daily time frame.

Although XOM has an excellent technical rating, it does not present a decent entry opportunity at the moment. XOM stock has a Setup Rating of 3 out of 10. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first. Click here to sign up for email alerts on when XOM stock consolidates and has a Setup Rating of 8 or higher.

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