(Reuters) -Exxon Mobil on Friday posted its first quarterly results following a contested board fight over its direction, registering its biggest profit in more than a year on rebounding demand for oil, gas and chemicals.
Oil producers are taking advantage of a doubling of crude oil prices last quarter to pare debt and increase shareholder payouts rather than spending more to boost production.
Exxon said its 2021 capital spending is expected to be at the lower end of the previously forecast range of $16 billion to $19 billion.
Deep cost cuts undertaken last year as the COVID-19 pandemic slashed demand have remained, allowing price gains to bolster profits.
The company said it had cut over $1 billion in costs in the first half of 2021, on top of structural cost reductions of $3 billion in 2020. Exxon said it was on pace to achieve total cost savings of $6 billion through 2023 relative to 2019.
Excluding items, it earned $1.10 per share, topping analysts’ average estimate of 99 cents per share, according to Refinitiv IBES data. The company foreshadowed the results in late June, prompting several analysts to reduce their earning projections.
Earnings from its chemicals and plastics business rose nearly five-fold from a year ago to $2.32 billion as margins expanded and demand rebounded.
Oil and gas production also led the way in the quarter with an operating profit of $3.19 billion. Output fell 2% to 3.6 million oil-equivalent barrels per day during the quarter.
The company’s net income for the second quarter came in at $4.69 billion, or $1.10 per share, compared with a loss of $1.08 billion, or 26 cents per share, a year ago, which included a gain related to reversing an inventory writedown. Absent the inventory change, the loss would have been $3 billion.
(Reporting by Arathy S Nair in Bengaluru; Editing by Saumyadeb Chakrabarty)
