An Exxon gas station seen in the Brooklyn neighborhood of New York on October 6, 2023.
Michael M. Santiago | Getty Images
Exxon Mobile First-quarter results on Friday fell short of expectations as the sector came under pressure from eroding refining margins and collapsing natural gas prices.
Exxon stock is down more than 3%.
Here’s what Exxon reported for the first quarter compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Earnings per share: $2.06 versus $2.20 expected
- Income: $83.08 billion versus $78.35 billion expected
The nation’s largest oil company reported net income of $8.22 billion, or $2.06 per share, a 28% decline from earnings of $11.43 billion, or $2.79 dollars per share, for the same period last year.
Revenue beat expectations at $83.08 billion, but was lower than last year, when the company reported $86.56 billion.
Exxon CEO Darren Woods said the results were in line with the company’s plans, attributing the shortfall to non-cash and inventory adjustments.
“Actually, in some cases, they outperformed,” Woods said of the results in an interview with CNBC’s “Squawk Box.” “You can see that in our operating cash flow, which beat consensus by about a billion dollars.”
But Exxon has been pressured by declining refining margins and natural gas prices that have fallen from last year’s highs. Natural gas prices have fallen 37% this year and refining margins are lower than they were a year ago. Chevron faced similar issues this quarter.
Oil and gas production profits fell 12% to $5.67 billion, from $6.46 billion in the same quarter last year, due to lower natural gas prices. Oil is up more than 16% this year, but the rise has done little to improve Exxon’s fortunes this quarter.
Exxon produced 3.78 million barrels per day during the quarter, down slightly from last year’s production of 3.83 million barrels per day. Production in Guyana reached more than 600,000 barrels per day in the first quarter.
“If you look at Guyana and the development there, I think it will go down as one of the best deepwater developments 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 the previous year, due to lower refining margins.
The company’s chemicals segment saw profits more than double, to $785 million, from $371 million in the same quarter last year.
Exxon is currently in dispute with Chevron over the latter’s pending acquisition of Hess Corp.. Exxon has taken Chevron to arbitration to defend the company’s claim for a right of first refusal over Hess’ assets in Guyana under a joint operating agreement.
Woods reiterated that Exxon was not looking to buy Hess. He said the company wanted to know the value Chevron places on Hess’ assets in Guyana and confirm its pre-emption rights. When asked if Exxon was seeking compensation from Chevron, Woods said he was keeping the company’s options open.
“First, we will confirm the pre-emptive rights and look at what the cash value of that asset is in this transaction, and then we will explore what opportunities are available to us,” Woods said.
Chevron said Friday it expects the Hess deal to close in 2024.
Read Exxon’s full earnings release here.
cnbc Business