ExxonMobil Stock Slips as Profit Falls Short of Estimates

Shares of ExxonMobil (XOM) slipped in early trading Friday as the oil and gas giant reported larger year-over-year profit declines than analysts were expecting.

ExxonMobil reported net income $3 billion lower than the first quarter of 2023, falling to $8.22 billion, or $2.06 per share, from the $11.43 billion and $2.79 per share the company reported last year. Analysts expected the decline to be smaller, projecting income of $8.77 billion, or $2.20 per share.

However, the total revenue it reported of $83.08 billion was above analyst estimates of $82.11 billion thanks to increased production from some of Exxon’s investments like its operations in Guyana.

Despite oil prices remaining high, Exxon and Chevron (CVX) were both projected to post less productive quarters thanks to lower natural gas prices and slim margins on refined products. Chevron also reported earnings Friday, coming closer to analyst projections.

Lower Natural Gas Prices Weigh on Results

Exxon cited the lower natural gas prices and refinery margins coming down from last year’s levels as reasons why profits fell in the quarter. The company also said it is continuing to cut costs, with current spending levels an estimated $10 billion below 2019 levels, with plans to continue driving savings to $15 billion by the end of 2027.

Exxon also announced a third consecutive quarterly dividend of 95 cents per share, set to be paid June 10 to shareholders of record as of May 15.

Assuming oil prices stay high, analysts estimate that companies like Exxon and Chevron will return to growing revenue and profits in the second quarter and beyond, with Exxon’s revenue and profit projected to rise to $87.39 billion and $9.97 billion, respectively, in the current quarter.

Exxon shares were down 3.0% at $117.68 in the opening minutes of trading Friday. The stock has gained 19% so far this year.

UPDATE: This article has been updated to reflect share price movements in early trading Friday.