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

EXXONMOBIL on Wednesday (Jul 5) signalled 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 US$7.8 billion from US$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.

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

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

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

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

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

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

Official results are due on Jul 28. REUTERS