I Wouldn't Buy ExxonMobil at a Record High. Here's the 1 Number That Worries Me.

ExxonMobil (XOM -2.94%) reported third-quarter earnings of $15.4 billion on Oct. 30, more than doubling its profit from the prior year. Adjusted earnings reached $17.5 billion, or $4.23 per share, while free cash flow totaled $19.1 billion. Indeed, those are impressive numbers.

But with ExxonMobil shares trading near record highs around $185, there's one figure from that report that would keep me from buying: $9.1 billion. That's how much adjusted profit ExxonMobil generated from its refining and fuels business.

It's also a reminder of how quickly the company's earnings can change when energy markets shift.

Refining profits may be difficult to sustain

ExxonMobil's adjusted Energy Products earnings, which include refining and fuel-related operations, more than doubled from $4.1 billion in the second quarter to $9.1 billion in the third quarter. These latest results benefited from stronger refining margins, which represent the difference between the cost of crude oil and the selling prices of products such as gasoline and diesel. But those margins can change dramatically depending on fuel demand, refinery capacity, and crude oil prices.

Meanwhile, Exxon's adjusted upstream earnings, generated from producing oil and natural gas, declined from $9.2 billion in Q2 to $7.3 billion in Q3. In other words, refining drove much of the earnings momentum, while the company's oil production business posted weaker profitability.

I'd wait for a pullback

ExxonMobil remains financially strong. Its substantial cash generation supports dividends, share repurchases, and continued investment in production. But if you're buying near $185, you're paying for a company whose recent earnings benefited heavily from unusually favorable refining conditions.

If those margins retreat toward historical levels, ExxonMobil could experience a significant earnings decline even if production remains strong. Don't get me wrong. I wouldn't bet against ExxonMobil's long-term prospects. I just wouldn't chase the stock at a record high when one of its biggest profit drivers could prove difficult to sustain.