Shares of oil and gas conglomerate, ExxonMobil, took a hit in Friday's early trading as year-on-year profit declines proved larger than analysts had expected. The company reported a net income drop of $3 billion in the first quarter of 2023, tallying a total of $8.22 billion, or $2.06 per share. This is a significant decrease from last year's $11.43 billion and $2.79 per share. Analysts predicted a less severe decline, with projected income of $8.77 billion, or $2.20 per share.
ExxonMobil's total revenue of $83.08 billion did surpass analyst estimates of $82.11 billion, boosted by increased production from investments like operations in Guyana.
Despite high oil prices, ExxonMobil, along with Chevron (CVX), were both anticipated to report less fruitful quarters due to decreased natural gas prices and tight margins on refined products. On the same day, Chevron reported its earnings, coming closer to analysts' projections.
ExxonMobil attributed its profit decline to reduced natural gas prices and shrinking refinery margins compared to last year. In addition, the corporation revealed its continued cost-cutting efforts, with current spending levels estimated at $10 billion below 2019 levels, aiming to push savings to $15 billion by 2027.
ExxonMobil also stated its third consecutive quarterly dividend of 95 cents per share will be disbursed on June 10 to shareholders on record by May 15.
Assuming the maintenance of high oil prices, analysts foresee companies like ExxonMobil and Chevron regaining growth in revenue and profits from the second quarter onwards. For ExxonMobil, revenue and profit are expected to reach $87.39 billion and $9.97 billion respectively in the current quarter.
As trading opened on Friday, Exxon shares had dipped by 3.0% to $117.68. However, the company has made a 19% gain in stock value this year.
This article is updated to reflect the fluctuations in share prices on Friday’s early trading.