Exxon signals 1Q operating profit fell 25% on softer energy prices

(Reuters) – Exxon Mobil Corp (XOM.N) on Tuesday signaled in a securities filing that first-quarter operating profits dropped about 25% from last year’s record levels as oil and gas prices eased.

Operating results could drop to about $9.6 billion, compared to $12.8 billion net profit from the fourth quarter, according to a snapshot of factors affecting first quarter earnings.

The drop was driven by the exploration business, with Exxon signaling operating results from pumping oil and gas would be about $5.2 billion, down from the $8.2 billion in last year’s final quarter.

Reuters Graphics
Reuters Graphics

Global oil prices fell about 7% to an average of $82 per barrel while U.S. gas prices fell by more than half in the most recent period, both compared to the final quarter of 2022. Global oil settled on Tuesday near $85 a barrel.

Profits from refining oil into gasoline, diesel and other energy products slipped to about $3.55 billion on higher maintenance costs and weaker margins, the filing indicated.

Its chemicals business was flat compared with the fourth quarter at about $300 million in operating profit, the snapshot showed. Earnings from motor oils fell to about $500 million from $800 million in the fourth quarter.

Full results are expected to be released on April 28.

Exxon shares were off about 1% on Tuesday at $115.

The earnings drop from weaker oil prices might be temporary. A surprise production cut disclosed on Sunday by the Organization of the Petroleum Exporting Countries and allies including Russia (OPEC+) have Wall Street analysts forecasting crude could reach $100 per barrel this year.

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