Exxon Mobil On Friday, it reported first-quarter earnings that fell short of expectations as the industry came under pressure from eroding refining margins and collapsing natural gas prices.
Exxon stock fell more than 3%.
Here's what Exxon reported for the first quarter compared to what Wall Street was expecting, based on a survey of analysts conducted by LSEG:
Earnings per share: $2.06 vs. $2.20 expected Revenue: $83.08 billion vs. $78.35 billion expected
The country's largest oil company reported net income of $8.22 billion, or $2.06 per share, down 28% from earnings of $11.43 billion, or $2.79 per share, in 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 plan, and attributed the earnings loss to non-cash tax adjustments and inventory adjustments.
“Actually, they outperformed in some cases,” Woods said of the results in an interview with CNBC's “Squawk Box.” “You can see that in our cash flow from operations, which exceeded consensus by about $1 billion.”
The earnings miss doesn't fundamentally change anything for Exxon stock and the decline is unlikely to continue Friday, said Jason Gabelman, managing director of energy equity research at TD Cowen.
Exxon has been under pressure from lower refining margins and natural gas prices, which have fallen from their highest levels last year. Natural gas prices are down 37% this year, and refining margins are lower than they were a year ago. Chevron I had similar issues this quarter.
Profits from oil and gas production fell by 12% to $5.67 billion, compared to $6.46 billion in the same quarter last year due to lower natural gas prices. Oil has risen more than 16% this year, but the rise did little to lift Exxon's fortunes this quarter.
Exxon produced 3.78 million barrels per day in this quarter, a slight decrease from the production of 3.83 million barrels per day in the same period last year. 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 fuels business saw its profits fall 67% to $1.38 billion, compared to $4.18 billion a year earlier, due to lower refining margins.
The company's chemical products segment saw profits more than double to $785 million compared to $371 million in the same quarter last year.
Exxon is currently locked in a dispute with Chevron over the latter's acquisition of… Hess company. Exxon has taken Chevron to an arbitration court to defend the company's right of first refusal claim over Hess' assets in Guyana under a joint operating agreement.
Woods confirmed that Exxon is not seeking to buy Hess. He said the company wants to know the value Chevron places on Hess's assets in Guyana and assert its rights of first refusal. When asked if Exxon was seeking compensation from Chevron, Woods said he was keeping the company's options open.
“First of all, we will assert pre-emption rights and look to see what the cash value of that asset is in that transaction, and then we will explore our opportunities,” Woods said.
Chevron said on Friday that it expects to close the Hess deal in 2024.
Read Exxon's full earnings release here.
