Exxon ‘Odd One Out’ on Share Buybacks Even as Profits Soar
(Bloomberg) -- Exxon Mobil Corp. just posted its biggest third-quarter profit in years but unlike peers it won’t be spending any of that cash on buybacks.
Royal Dutch Shell Plc this week expanded share repurchases by 25 percent to $2.5 billion. Meanwhile, Chevron Corp. is open to expanding the buyback program initiated earlier this year if crude prices remain high, Chief Financial Officer Pat Yarrington said during a conference call Friday.
Exxon, however, remains steadfastly against the idea, prompting Raymond James Financial Inc. analyst Pavel Molchanov to cast the company as the “odd one out” among major oil producers.
“We’re not going to prioritize buybacks,” Neil Hansen, Exxon’s investor relations chief, said during a conference call. The oil giant instead wants to focus on dividends and growth projects, he said.
That hasn’t gone down well with investors. The stock dipped into negative territory around midday Friday, compared with Chevron’s 2.8 percent advance.
“There is room to reinstate share buyback (beyond simply offsetting dilution), even assuming a price deck less bullish than ours,” Molchanov said in a note. “However, management is still not pulling the trigger.”
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