The EXXON profit took $ 1.5 billion in the last quarter. Is it still worth buying oil stock?

Exxon expects its earnings to be reduced in the second quarter of $ 1.5 billion.
The oil giant is likely to still announce the leading profitability in the industry.
It is expected that by 2030 Income will increase meaningfully, even if the raw prices do not improve.
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Exxonmobil I Recently, investors gave a look at the second quarter financial results. The oil giant revealed that his profit would be reduced by $ 1.5 billion compared to the first quarter, primarily due to weaker oil and gas prices.

That profit downturn is expected have to Some investors wonder if this is a threatening sign Oil stocks the future. Here’s a look, or Exxonmobil Despite its decline in profit, a good investment remains.

Image Source: Getty Images.

In a recent regulatory application, Exxon noted that he expects the oil and gas production segment above will see More than $ 1 billion struck from lower oil prices and nearly $ 1 billion affects weaker gas prices. Based on a more positive note, the company hopes that higher refining margins will increase its income by about $ 300 million. In general, the company expects its profit to decrease by about $ 1.5 billion compared to the first quarter. It officially reports the financial outcomes of her second quarter August 1;

Although the expected fall is a lot of money, Exxon will still announce a very profitable quarter. The oil giant announced in the first quarter of $ 6.8 billion profit and $ 7.7 billion in full profit. At that time, this prompted all international oil companies (IOC) during that period. By comparison, Chevron reported about $ 3.5 billion in revenue ShellThe adjusted income amounted to $ 5.6 billion. Exxon also prompted IOC cash flows from operations ($ 13 billion) and shareholders’ distribution ($ 9.1 billion, including $ 4.8 billion for the redemption sector). Thus, while Exxon expects the second quarter to decrease, it will still be sure to ensure the financial results of the industry.

A large co -operator of EXXon’s main profit is its structural expenditure saving program. Since 2019 Exxon has it removed $ 12.7 billion costs out of Her business that is more than all the other IOC. In the first quarter alone, this reduced the cost of $ 600 million. Exxon also took advantage of the focus on investing in its compulsory assets, such as Smallian and Guyana, whose costs are low and high profit margins.

Although Exxonmobil expects its profit to be reduced in the second quarter, he expects to be repeated in the coming years, even if oil prices do not recover. The oil giant launched its plan last December last December to 2030 The aim of that strategy is to be implemented growth potential $ 20 billion and $ 30 billion cash flow by 2030 compared to 2030 2024 Initial. This means that the complex annual growth rates are 10% (earnings) and 8% (cash flow). Exxon can achieve this growth by assuming that the green oil average is around $ 65 per barrel (recently $ 70 a barrel).

Exxon expects two catalysts to encourage their income growth plan. A The core its aspect of its strategy is to continue to pour the capital to to develop their mandatory property. In the coming years, the company plans to invest about $ 140 billion in major capital projects and its Perm Basin Development Program. Exxon expects to have more than 30% return during the life of those investments. Its capital spending plan will increase the production of higher margins, which will help increase its profitability. For example, a company is Starting 10 major projects this year that can earn over $ 3 billion in increased income to 2026

In addition, the oil company expects to continue to save structural costs. It is aimed at 2030. A total of $ 18 billion. The company has provided several strategies to achieve this purpose, including simplification of its business processes, optimization of supply chains, and update of information technology and data management systems.

The oil giant’s plan to increase its profitability and cash flows should enable the shareholders to increase. Exxon should be able to further increase its dividends (increased the benefit for 42 consecutive years) and redeeming shares.

Due to the volatility of goods, Exxon will range from a quarter to a quarter. However, the company hopes that its income will increase significantly in the coming years as it will be implementing its investment plan and expenditure saving initiatives. That long -term growth Puts Exxon is a great opportunity to continue to create shareholders’ value, so it does look like Great Stocks to be purchased and stored despite the reduction of current earnings.

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Matt Digallo has positions on Chevron. Motley fool is a position and recommends Chevron. The Motley fool has a disclosure policy.

The EXXON profit took $ 1.5 billion in the last quarter. Is it still worth buying oil stock? initially released by The Motley Fool

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