01—Abstract
Summary
Summary of the 8-K filed January 4, 2024. Cited figures are marked; the original filing is the authoritative source.
ExxonMobil's January 4, 2024 Form 8-K (Item 7.01, Regulation FD) furnishes Exhibit 99.1, a "4Q23 Earnings Considerations" document.
It is not a full earnings release and gives no total 4Q23 earnings estimate. Management explicitly states that the factors listed are a partial view of changes from 3Q23 and do not reflect operating performance, unscheduled downtime, or FX effects. The baseline is 3Q23 U.S. GAAP earnings of $9.1 billiona (Upstream $6.1B, Energy Products $2.4B, Chemical Products $0.2B, Specialty Products $0.6B, Corporate & Financing -$0.4B).
Excluding identified items, Energy Products was $2.5Bb. The most material item for investors is the Upstream impairment estimate of $2.4B to $2.6B, primarily tied to idle Santa Ynez Unit assets and facilities in California. Management says ongoing state regulatory challenges have delayed the restart of production, which signals continued uncertainty around that asset.
Other identified items include smaller Energy Products and Chemical impairments, Upstream divestment gains of $0.2B to $0.4Bc, and other charges. Market factors are mixed: lower liquids prices (-$0.8B to -$0.4B Upstream) and weaker Energy Products industry margins (-$1.7B to -$1.5B) are partly offset by higher gas prices (+$0.4B to +$0.8B Upstream) and higher Chemical margins (+$0.3B to +$0.5B). Year-end inventory effects and derivative mark-to-market movements are also estimated, with wide ranges.
The disclosure is useful as a directional guide to the quarter-over-quarter drivers, particularly the Upstream impairment, weaker refining margins, and lower liquids prices. Investors should treat the ranges as preliminary, subject to finalization, and not as a forecast of reported earnings.
The full 4Q23 results are scheduled for release around 5:30 a.m. CT on Friday, February 2, 2024, via the company website and EDGAR.
02—Key points
Key Highlights
- 3Q23 baseline: U.S. GAAP earnings of $9.1B (Upstream $6.1B, Energy Products $2.4B, Chemical $0.2B, Specialty $0.6B, Corporate & Financing -$0.4B); $9.1B excluding identified items per the exhibit's reconciliation.
- Largest identified item: Upstream impairments estimated at $2.4B to $2.6B, primarily idle Santa Ynez Unit assets in California, with restart efforts hampered by state regulatory challenges.
- Market headwinds: lower liquids prices (Upstream -$0.8B to -$0.4B) and weaker Energy Products industry margins (-$1.7B to -$1.5B) are the largest negative market factors.
- Partial offsets: higher gas prices (Upstream +$0.4B to +$0.8B) and improved Chemical industry margins (+$0.3B to +$0.5B).
- Other identified items include Upstream divestment gains of $0.2B to $0.4B, smaller Energy Products and Chemical impairments, and tax-related items.
- No consolidated 4Q23 earnings estimate is provided; management explicitly excludes operating performance, unscheduled downtime, and FX effects from these ranges.
- Full 4Q23 results are scheduled for approximately 5:30 a.m. CT on Friday, February 2, 2024, on the company website and via EDGAR Form 8-K.
03—Questions
Frequently Asked Questions
Does this filing provide ExxonMobil's 4Q23 earnings?
No. The exhibit lists estimated quarter-over-quarter factors relative to 3Q23 results. It explicitly states it is not an estimate of 4Q23 earnings and does not capture all changes, including operating performance, unscheduled downtime, and foreign exchange effects. Full results are to be released on February 2, 2024.
What is the most significant negative item for 4Q23?
The largest identified item is the Upstream impairment of roughly $2.4B to $2.6B, primarily related to idle Santa Ynez Unit assets and associated facilities in California. The company says it is working to restart production but faces continuing challenges in the state regulatory environment.
How are market conditions expected to affect results?
Market factors are mixed. Lower liquids prices and weaker Energy Products refining margins are expected to reduce earnings, while higher gas prices and improved Chemical margins provide partial offsets. Derivative mark-to-market and year-end inventory effects add further uncertainty, with the exhibit showing wide ranges.
What is the 3Q23 baseline the company is comparing against?
3Q23 U.S. GAAP earnings were $9.1B, with Upstream at $6.1B, Energy Products at $2.4B (or $2.5B excluding identified items), Chemical Products at $0.2B, Specialty Products at $0.6B, and Corporate & Financing at -$0.4B. The company notes that numbers may not sum precisely due to rounding.
Why does the filing include non-GAAP measures, and how should investors read them?
Earnings excluding Identified Items is a non-GAAP measure that removes significant non-operational events, generally those with an impact of at least $250 million at the corporate level. Management says it improves comparability across periods, but the measure is not a substitute for U.S. GAAP net income and some smaller non-operational items remain included.
04—Continue