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How Was ExxonMobil’s Cash Position in Q1?


Jun. 6 2019, Published 8:12 a.m. ET

Analyzing ExxonMobil’s cash flows

In the first quarter, ExxonMobil (XOM) generated ~$8.4 billion in cash from operations—a 2% YoY fall driven by lower earnings. The company’s cash outflows from investing were $5.8 billion. The cash outflows from financing stood at $1.0 billion in the first quarter.

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ExxonMobil’s cash flow shortfall in the first quarter

In the first quarter, ExxonMobil spent $5.2 billion on the addition to plant, property, and equipment. The company’s dividend payments stood at $3.5 billion in the same period. These vital outflows stood at $8.7 billion in the first quarter. ExxonMobil’s inflows fell short by $0.3 billion in covering these outflows—the difference between cash flow from operations of $8.4 billion and vital cash outflows of $8.7 billion.

The shortfall stood at 4% when estimated as a percentage of the company’s cash flow from operations. Royal Dutch Shell (RDS.A), Total (TOT), and BP (BP) also saw cash flow shortfalls in the first quarter. Shell, Total, and BP’s shortfalls stood at 4%, 25%, and 31% of their cash flows from operation, respectively, in the first quarter.

ExxonMobil’s additional investments and stock repurchases stood at $0.9 billion and $0.4 billion in the first quarter. To fund the shortfall, investments, and repurchases, the company raised ~$3.0 billion of debt. The additional investments raised the company’s cash balance from $3.0 billion at the beginning of the first quarter to $4.6 billion at the end of the quarter.

Cash flow analysis

ExxonMobil saw a marginal cash flow shortfall in the first quarter due to lower cash inflows and higher capex outflows. In the first quarter, the company’s capex outflows stood at 62% of its cash flow from operation compared to 39% in the first quarter of 2018. The higher capex could result in better earnings in the future.

ExxonMobil had the balance sheet strength to raise funds and improve its liquidity position. Despite the higher debt, the company’s total debt as a percentage of its capital structure stood at 17%—the lowest in the industry, which is a good sign.


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