[Asia Economy Reporter Yujin Cho] ExxonMobil, the largest oil company in the United States, posted its highest-ever net profit last year, benefiting from the surge in international oil prices caused by the Ukraine crisis.
In terms of net profit, it ranked third after Apple and Microsoft (MS), surpassing major pharmaceutical companies such as Pfizer as well as leading financial and IT firms.
On the 31st (local time), ExxonMobil announced through its earnings report that it recorded a net profit of $55.7 billion (approximately 68.85 trillion KRW) last year, marking the highest profit since its founding.
ExxonMobil had recorded a net loss of $22 billion in 2020 due to a sharp drop in energy demand and price collapse following the COVID-19 outbreak, but it offset all those losses within two years.
In the fourth quarter alone, it posted a net profit of $12.8 billion, a 44% increase compared to $8.9 billion in the same period last year. However, earnings per share were $3.09, falling short of Wall Street’s estimate of $3.28.
The Wall Street Journal (WSJ) reported that ExxonMobil’s record profits last year surpassed those of major pharmaceutical companies like Pfizer, as well as financial firms and some big tech companies.
Among U.S. companies that have announced earnings so far, only Apple and Microsoft have posted higher profits than ExxonMobil. Its cash holdings also stood at $76.8 billion at the end of last year, ranking third among U.S. companies after Apple and MS.
ExxonMobil’s deficit in 2020 was the first in over 40 years since its founding. The shock to its earnings caused its stock price to drop nearly 55%, leading to the ignominy of being removed from the Dow Jones Industrial Average?a composite of 30 blue-chip companies on the New York Stock Exchange (NYSE)?for the first time in a century.
However, the situation reversed after Russia’s invasion of Ukraine in February last year triggered a Cold War-like standoff, causing international oil prices to surge.
Amid this unprecedented boom, ExxonMobil’s stock price soared about 80% last year, ranking fourth highest among companies included in the S&P 500 index. While the S&P 500 index fell 9% last year, the energy sector rose by 37%.
Regarding the background of the record profits, Darren Woods, CEO of ExxonMobil, said, "We consistently invested in fossil fuels even during economic downturns," adding, "While other companies avoided investments, we increased them."
ExxonMobil’s competitor Chevron recently announced an annual net profit of $36.5 billion.
The WSJ predicted that these historic earnings by the oil giants would face sharp criticism from the Biden administration and political circles. In June last year, President Joe Biden threatened to impose a windfall tax on ExxonMobil, saying the energy industry "made more money than God" and that the profits should be returned to consumers.
Regarding the windfall tax controversy, ExxonMobil’s Chief Financial Officer (CFO) Katherine Mikells emphasized, "New investments are more important than ever to meet the increasing global demand."
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