Exxon Improves Cash Flow and Reduces Debt
Our fair value estimate and narrow moat rating are unchanged, as increased shareholder returns remain on hold.
Exxon (XOM) turned in a strong second quarter buoyed by a recovery in commodity prices and a record quarter from its chemical segment. Downstream improved but continued to be a drag due in part to planned maintenance and weak market conditions. Adjusted earnings improved to $4.7 billion from a loss of $3.0 billion last year. Meanwhile, operating cash flow surged to $10.3 billion from $1.5 billion the year before as debt fell another $2.7 billion during the quarter bringing the total reduction to $7 billion since year-end 2020. As a result, net debt to capital fell to 26.5% from 28.7% at the end of 2020. Our fair value estimate and narrow moat rating are unchanged.
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Allen Good does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.