Exxon signals sharp profit drop, cites low natgas prices, refining margins

(Reuters) – Exxon Mobil Corp (XOM.N) on Wednesday signaled second-quarter operating profits fell sharply on lower natural gas prices and weaker oil refining margins, according to a regulatory filing.

Operating earnings dropped to about $7.8 billion from $17.85 billion a year earlier, when surging oil and gas prices after Russia’s invasion of Ukraine boosted global energy results to record levels.

U.S. natural gas futures on Wednesday were trading close to lowest level in two years, at $2.657 per million British thermal units, amid lower consumption levels in Europe.

Exxon’s second-quarter outlook also slipped from record first quarter profit of $11.4 billion, according to a Reuters compilation of estimates by business units.

Wall Street is looking for per-share profit of $2.27 for the quarter ended June 30, according to Refinitiv. The stock closed on Wednesday at $106.91 a share, roughly flat year to date.

Results from pumping oil and gas – Exxon’s largest and most profitable business – fell about $2.2 billion from the $6.5 billion delivered in the first quarter, the tally showed. Lower natural gas prices reduced operating profit by about $2 billion, the filing showed.

Weaker refining margins also reduced operating results at its gasoline and diesel business by another $2.1 billion, Exxon said in a preview of factors affecting second quarter earnings.

Chemicals business performed better in the quarter with operating earnings indicating quarterly profits of $800 million, twice the level from the first quarter.

Official results are due on July 28.

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