Aramco net profit up 34.6%... 9-month cash flow falls below dividends

Saudi Aramco reported third-quarter net income of $36.252 billion, up 34.6% year over year, as average realized crude prices rose to $95.2 per barrel from $70.1 a year earlier. Adjusted net income came in at $31.198 billion, up 9% year over year but down 6.6% from the prior quarter. Despite the profit gain, free cash flow for the first nine months of 2023 fell $6.558 billion short of the base dividend paid over the same period. The shortfall matters because Aramco's dividend is a key pillar of Saudi fiscal revenue and a major draw for income investors, and the gap raises questions about how the payout will be funded if oil prices soften. Next, watch fourth-quarter realized crude prices, any change to Aramco's dividend policy, and the company's capital spending plans.