Exxon Mobil's Q1 Earnings Fall Short, Revenue Beats Expectations

Exxon Mobil's Q1 earnings have fallen short of expectations, with a 28% decrease in net income compared to the same period last year. The company's earnings per share and fuel business earnings were also down, mainly due to eroding refining margins and collapsing natural gas prices. However, revenue came in higher than expected, and the company's chemical products segment saw profits more than double. Exxon's production output was slightly down, but Guyana's production reached over 600,000 barrels per day. Meanwhile, Exxon is engaged in a dispute with Chevron over Chevron's pending acquisition of Hess Corp's assets in Guyana. Exxon is seeking to confirm its preemption rights and the value Chevron is placing on Hess' Guyana assets.

Key Takeaways

• Exxon Mobil's Q1 earnings miss expectations, causing a 3% stock decline
• Earnings per share: $2.06 vs $2.20 expected; Revenue: $83.08 billion vs $78.35 billion expected
• Lower refining margins and collapsing natural gas prices lead to 28% earnings decrease
• Oil and gas production profits down 12%, despite 16% oil price increase
• Fuel business earnings plummet 67% due to lower refining margins
• Chemical products profits more than double; Guyana production reaches 600,000 barrels per day
• Exxon disputes Chevron's Hess Corp acquisition, seeking to confirm preemption rights and value of assets

Analysis

Exxon Mobil's Q1 earnings miss highlights the impact of lower refining margins and natural gas prices, causing a 28% decrease in net income. The slump in fuel business earnings and oil and gas production profits indicates broader industry challenges. The dispute with Chevron over Chevron's Hess Corp acquisition may affect the companies' operations and investor confidence in the sector. Meanwhile, Guyana's production growth and chemical products segment's success point to potential opportunities in strategic markets. In the long term, Exxon's financial performance and its resolution of the Chevron dispute will have consequences for investors, stakeholders, and the energy sector as a whole.

Did You Know?

• Refining margins: Refining margins refer to the difference between the cost of crude oil and the selling price of refined products, such as gasoline, diesel, and jet fuel. When refining margins are low, as in Exxon Mobil's case, it means the company is making less profit from converting crude oil into these products due to the narrower spread between input and output prices.

• Preemption rights: Preemption rights refer to a company's right to purchase or match an offer made by a third party for a specific asset or business. In Exxon's case, they are disputing Chevron's acquisition of Hess Corp's assets in Guyana, claiming preemption rights to confirm the value of the assets and potentially match Chevron's offer.

• Earnings per share (EPS): Earnings per share is a measure of a company's profitability, calculated by dividing the company's net income by the number of outstanding shares. It represents the portion of a company's earnings attributed to each shareholder. A lower-than-expected EPS figure, as seen in Exxon Mobil's Q1 earnings, may indicate reduced profitability or earnings growth concerns.