Analyst Note| Allen Good, CFA |
Exxon 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.