Exxon Flags Lower Quarterly Profit Amid Low Natural Gas Prices, Refining Margins

Exxon Mobil Corp XOM anticipates a decrease in second-quarter earnings by roughly $4 billion due to lower natural gas prices and refining margins.

For the first quarter this year, Exxon booked record earnings of $11.6 billion, double from $5.48 billion a year ago and down from $12.75 billion for the fourth quarter of 2022.

The lower earnings from these two sectors may bring Exxon's net income down to approximately $7.5 billion, Bloomberg noted, citing RBC Capital Markets analyst. 

In an SEC filing on Wednesday, the U.S. supermajor estimates lower Q2 earnings due to up to $2.2 billion lower earnings in the upstream division because of low U.S. benchmark natural gas prices and another up to $2.2 billion decline in the energy products division due to lower industry margins. 

The profits of major oil companies are declining from last year's record levels as commodity prices decrease in the face of rising global interest rates and China's slow recovery from Covid-related lockdowns.

Lower oil prices are expected to reduce earnings by only about $100 million, according to Exxon.

RBC's net-income outlook does not include the movements in unsettled derivatives.

Exxon noted that the 2Q23 Earnings Considerations filing with SEC "is not comprehensive of all changes between 1Q 2023 and 2Q 2023 results and is not an estimate of 2Q 2023 earnings for the Corporation."

Wall Street estimates for EPS stand at $2.24 and revenue at $103.10 billion.

Price Action: XOM shares are down 2.22% at $104.54 during the premarket session on the last check Thursday.

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