Exxon Mobil’s profits have taken a tumble in the first quarter as natural gas prices took a nosedive and industry refining margins shrank.
The energy behemoth posted earnings of $8.22 billion, or $2.06 per share, for the three months ending March 31, a drop from $11.43 billion, or $2.79 per share, a year earlier.
Despite falling short of Wall Street predictions, Exxon does not modify its reported results based on one-off events such as asset sales. Analysts had forecast earnings of $2.19 per share.
Shares experienced a minor dip before the market opened on Friday. The Texas-based firm’s revenue totalled $83.08 billion, a fall from $86.56 billion the previous year.
Wall Street had projected revenue of $86.6 billion, reports the Mirror.
Production in Guyana surpassed expectations, hitting over 600,000 oil-equivalent barrels per day, according to the company. Exxon went on a spending spree last year when oil prices were climbing.
In July, it announced it would fork out $4.9 billion for Denbury Resources, an oil and gas producer that has branched into carbon capture and storage and stands to benefit from shifts in US climate policy.
Exxon outmanoeuvred the competition in October with its $60 billion purchase of shale producer Pioneer Natural Resources. However, the Federal Trade Commission, tasked with enforcing federal antitrust laws, has asked for more information from the companies about the proposed deal.
The Federal Trade Commission has requested additional information from Chevron as it scrutinises the oil giant’s proposed mega-merger, casting doubt on whether the deal could breach US antitrust laws. Amidst a cash reserve surge for top energy producers, the sector is witnessing a tidal wave of mergers and acquisitions.
Notably, in October, Chevron made headlines with its staggering $53 billion bid to take over Hess Corp.
Tensions in the Middle East are escalating, particularly due to the ongoing conflict between Israel and Hamas, which is exerting pressure on the already volatile oil markets and raising fears of a broader regional conflagration. Although the skirmishes have not yet impacted global oil supplies directly, the US Energy Information Administration warns that “they raise the potential for oil supply disruptions and higher oil prices.”
In other industry news, Chevron Corp. has reported a robust first-quarter profit of $5.5 billion, equating to $2.97 per share, with an adjusted profit marginally lower at $2.93 per share.
These figures have surpassed the expectations of Wall Street analysts, who, according to Zacks, had forecast earnings of $2.84 per share. It’s worth noting that Chevron’s reported earnings do not reflect adjustments for one-off events such as asset sales.
Despite the strong earnings, Chevron’s revenue report of $48.72 billion did not meet the anticipated $49.94 billion projected by Wall Street experts, leading to a dip in Chevron’s shares during premarket trading.
