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Investing.com – Exxon Mobil stock (NYSE:XOM) rose 1.5% in premarket trading Tuesday after the company beat earnings estimates for the fourth quarter, thanks to higher margins and capacity utilization.
With crude and gas prices surging as demand recovered in the second half of last year, Exxon swung back to a net profit of nearly $9 billion compared to a loss of $20 billion in the same period a year ago.
Against that backdrop, Exxon said it has initiated the $10 billion share repurchase program it flagged in October, and will conclude the exercise over 12-24 months.
Shortages in Europe and Asia have pushed crude and gas prices to multi-year highs. Last week, crude crossed $90 a barrel for the first time since 2014. Integrated energy companies such as Exxon and Shell (LON:RDSa) with both upstream and downstream operations, tend to benefit the most in such a booming market.
In the upstream business that involves exploration of crude and gas, average realizations for crude oil increased 8% from the third quarter. Natural gas realizations increased 63% from the prior quarter.
Margins improved in the refining business that involves making of fuels for end-use. Refining throughput, a measure of utilization, in the quarter was the highest since 2013.
Fourth-quarter revenue jumped 83% to nearly $85 billion but fell short of estimates.
Any disappointment there was softened by the company saying it will exceed its 2023 target of cutting $6 billion in operating costs, having already reached close to $5 billion. The target was set in 2019.
