America’s biggest oil company ExxonMobil posted a record profit for the second straight quarter as oil and gas prices remained high. Chevron, the No. 2 US oil company, also posted much better-than-expected results.
ExxonMobil earned $18.7 billion, excluding special items, up 6% from its record second-quarter results and up 177% from a year ago. Earnings of $4.45 per share beat the $3.79 forecast by analysts polled by Refinitiv.
Chevron ( CVX ), the nation’s second-largest oil company, reported a big jump in revenue that easily beat forecasts. Profits of $10.8 billion were almost double the $5.7 billion it made a year ago. But it was slightly lower than the $11.4 billion it earned on that basis in the second quarter. Earnings per share of $5.56 easily beat the $4.81 forecast.
For the second quarter in a row, ExxonMobil failed to report record profits, as companies tend to do when they hit all-time highs. Reuters reported three months ago that the second quarter was a record profit for both companies. Chevron also did not mention that it was a record profit in the previous period. With consumer anger over high gas prices, both companies likely wanted to avoid drawing attention to their record profits.
However, ExxonMobil reported record production from its refineries. Oil companies have responded to calls from the Biden administration and Congress to increase supplies of gasoline and other petroleum products in the face of high prices and low supplies caused by Russia’s invasion of Ukraine.
Oil companies have generally been slow to increase crude oil production, preferring to take their profits and return them to shareholders through share buybacks and dividends to support share prices.
ExxonMobil said it has distributed $11.2 billion in dividends on its shares this year and recaptured $10.5 billion as part of a plan to buy back $30 billion by the end of next year. Meanwhile, it has spent only $15.2 billion on exploration and capital expenditures.
But oil companies have been eager to run as much oil as possible from their refineries, given high retail prices and refinery margins. Much of the excess oil has come from the strategic petroleum reserve, the nation’s emergency oil storage, releases of one million barrels of oil per day.
U.S. retail gas prices fell for much of the quarter after hitting a record high of $5.02 on June 14, before the quarter began. This was mainly driven by growing concerns among oil traders that the US and the global economy could soon fall into recession, which would reduce travel and demand for gas and other products. However, despite the drop in gas prices for most of the quarter, they remained above year-ago levels, as well as the price before Russia’s invasion of Ukraine.
ExxonMobil shares are up 76% and Chevron shares are up 56%. Both rose another 2% in premarket trade, with better-than-expected results.