Summary
ExxonMobil reported a record first quarter in 2008, with net income reaching $10.89 billion, a significant 17% increase compared to the same period in 2007. This strong performance was driven by record crude oil and natural gas prices, which boosted upstream earnings considerably. Despite robust upstream results, the company saw lower refining and chemical margins, as well as decreased production volumes, which partially offset the gains. Investors should note the company's increased share repurchase program, with $8.0 billion allocated in the first quarter of 2008 to reduce outstanding shares by 1.8%. This, coupled with a 13% increase in total distributions to shareholders (dividends and share buybacks), indicates a strong focus on returning capital to investors. However, higher operating costs and taxes, along with the ongoing impact of the Venezuela expropriation, are factors to monitor.
Key Highlights
- 1Record first quarter net income of $10.89 billion, up 17% year-over-year.
- 2Earnings per share increased to $2.05 ($2.03 diluted), up 25% from $1.64 ($1.62 diluted) in Q1 2007.
- 3Upstream earnings surged by $2.74 billion to $8.79 billion, primarily due to record crude oil and natural gas prices.
- 4Significant increase in capital expenditures to $5.5 billion, up 30% from the prior year, reflecting continued investment in future production.
- 5Share repurchases were accelerated, with $8.0 billion spent in Q1 2008 to reduce outstanding shares by 1.8%.
- 6Total distributions to shareholders (dividends and share buybacks) increased 13% to $9.9 billion.
- 7Effective income tax rate increased to 49% from 44% in the prior year, influenced by higher non-U.S. upstream income.