10-QPeriod: Q3 FY2009

EXXON MOBIL CORP Quarterly Report for Q3 Ended Sep 30, 2009

Filed November 5, 2009For Securities:XOM

Summary

ExxonMobil Corporation (XOM) reported its third-quarter and nine-month results for the period ending September 29, 2009. The company experienced a significant year-over-year decline in earnings for both periods, primarily driven by lower crude oil and natural gas prices. For the third quarter, net income attributable to ExxonMobil fell to $4.73 billion from $14.83 billion in the prior year, with earnings per share dropping to $0.98 from $2.86. Similarly, nine-month earnings decreased to $13.23 billion from $37.40 billion in 2008. Despite the earnings decline, ExxonMobil continued to demonstrate financial strength and a commitment to long-term investment. The company highlighted robust investment in projects like QatarGas, RasGas, and Gorgon LNG, emphasizing its strategy to invest across the economic cycle. Cash flow from operating activities remained substantial, though lower than the previous year, and the company continued to return capital to shareholders through dividends and significant share repurchases, a key focus for investors monitoring capital allocation strategies.

Financial Highlights

40 data points
Beta

Net Income

$4.73B

EPS (Diluted)

$0.98

Total Assets

$229.31B

Cash & Equivalents

$12.47B

Free Cash Flow

$3.34B

Financial Statements
Beta
SG&A Expenses$3.89B
Operating Expenses$73.06B
Interest Expense$62.00M
Net Income$4.73B
EPS (Basic)$0.98
EPS (Diluted)$0.98
Shares Outstanding (Basic)4.78B
Shares Outstanding (Diluted)4.80B

Key Highlights

  • 1Net income attributable to ExxonMobil for the third quarter of 2009 was $4.73 billion, a decrease of 68% compared to $14.83 billion in the third quarter of 2008.
  • 2Earnings per common share for the third quarter of 2009 were $0.98, down from $2.86 in the prior year's quarter, attributed to lower earnings and a reduced share count.
  • 3For the first nine months of 2009, net income was $13.23 billion, a significant drop from $37.40 billion in the same period of 2008.
  • 4Upstream earnings experienced a substantial decline due to lower crude oil and natural gas prices, which reduced earnings by approximately $4.9 billion in the third quarter and $15.8 billion for the nine-month period.
  • 5Downstream earnings also declined significantly, with third-quarter earnings down $2.69 billion year-over-year, primarily due to lower refining margins.
  • 6ExxonMobil continued its substantial capital investments, with $18.8 billion spent on capital and exploration expenditures in the first nine months of 2009, aimed at future production growth.
  • 7The company returned a total of $22.0 billion to shareholders through dividends and share repurchases in the first nine months of 2009, demonstrating a commitment to capital return.

Frequently Asked Questions

The primary driver for the significant decrease in earnings was the substantial decline in crude oil and natural gas prices (realizations), which negatively impacted the Upstream segment's profitability. Lower refining margins also contributed to the decline in the Downstream segment.

ExxonMobil continued its disciplined investment strategy, allocating $18.8 billion to capital and exploration expenditures in the first nine months of 2009 to support future production growth. Simultaneously, the company returned a substantial $22.0 billion to shareholders through dividends and significant share repurchases, signaling a commitment to shareholder returns even amidst challenging market conditions.

The filing mentions ongoing litigation related to the Exxon Valdez case, with after-tax charges taken for punitive damages and interest. Additionally, there are environmental compliance matters at the Baytown, Texas refinery and a plea agreement related to the Migratory Bird Treaty Act. ExxonMobil stated it does not believe the ultimate outcome of any currently pending lawsuit will materially adversely affect its operations or financial condition. It also notes expropriation of its interest in the Cerro Negro Project in Venezuela, with arbitration ongoing, but does not expect a material effect on its operations or financial condition.

Despite the current economic weakness and reduced demand, ExxonMobil highlighted its robust investment program and strong positioning for future production growth. The company pointed to projects like QatarGas, RasGas, and Gorgon LNG as contributors to long-term production and a solid foundation for the future. They emphasize their strategy of investing across the economic cycle.