Exxon Mobil on Friday reported first-quarter earnings that fell in need of expectations because the industry got here under pressure from shrinking refining margins and slumping natural gas prices.
Exxon shares fell greater than 3%.
Here’s something Exxon reported for the primary quarter in comparison with Wall Street expectations based on an analyst survey by LSEG:
- Earnings per share: $2.06 versus expected $2.20
- Revenue: $83.08 billion versus expected $78.35 billion
The country’s largest oil company reported net income of $8.22 billion, or $2.06 per share, down 28% from a profit of $11.43 billion, or $2.79 per share corresponds to the identical period last yr.
Revenue beat expectations at $83.08 billion, but was lower than a yr ago when the corporate reported $86.56 billion.
Exxon CEO Darren Woods said the outcomes were in step with the corporate’s plan and attributed the profit miss to non-cash tax and inventory adjustments.
“In fact, in some cases they have exceeded,” Woods said of the ends in an interview with CNBC’s “Squawk Box.” “You can see that in our cash flow from operations, which exceeded consensus by around $1 billion.”
Jason Gabelman, managing director of energy equity research at TD Cowen, said the earnings miss doesn’t fundamentally change Exxon’s stock and Friday’s decline is unlikely to proceed.
Exxon has come under pressure from lower refining margins and natural gas prices, which have fallen sharply from last yr’s highs. Natural gas prices are down 37% this yr and refining margins are lower than a yr ago. Chevron faced similar issues this quarter.
Oil and gas production profits fell 12% to $5.67 billion, in comparison with $6.46 billion within the year-ago quarter, on account of lower natural gas prices. Oil prices are up greater than 16% this yr, however the rally has done little to enhance Exxon’s situation this quarter.
Exxon produced 3.78 million barrels per day within the quarter, down barely from production of three.83 million barrels per day within the year-ago period. Production in Guyana reached greater than 600,000 barrels per day in the primary quarter.
“If you look at Guyana and the development there, I think it will go down as one of the best deepwater projects in the history of the industry,” Woods told CNBC.
Exxon’s fuel business saw profits fall 67% to $1.38 billion from $4.18 billion a yr ago, driven by lower refining margins.
The company’s chemical products segment saw profit greater than double to $785 million in comparison with $371 million within the year-ago quarter.
Exxon is currently in a dispute with Chevron over its pending acquisition of Hess Corp. Exxon has taken Chevron to arbitration to defend the corporate’s right of first refusal on Hess’ assets in Guyana under a joint operating agreement.
Woods reiterated that Exxon has no intention of shopping for Hess. He said the corporate desires to know what value Chevron places on Hess’ assets in Guyana and ensure its rights of first refusal. Asked whether Exxon is searching for compensation from Chevron, Woods said he’s keeping the corporate’s options open.
“First we will confirm the first refusal rights and see what the present value of that asset is under this transaction, and then we will explore the options available to us,” Woods said.
Chevron said Friday that the Hess deal is predicted to shut in 2024.
