Exxon Mobil Corporation’s first-quarter profits fell short of analysts’ expectations, despite strong performance from its operations in Guyana. The oil major reported a 28% year-over-year drop in earnings for the quarter, as weaker refining margins and lower natural gas prices offset gains in production volumes.
Exxon posted first-quarter earnings of $8.22 billion, down from $11.43 billion a year earlier. The company’s profit per share of $2.06 was 6% below the Wall Street consensus estimate of $2.20 per share, according to LSEG data.
The decline in earnings was primarily driven by a 14% drop in oil and gas production profits due to lower natural gas prices, as well as a 67% plunge in refining earnings due to weaker fuel margins, mark-to-market derivatives, and higher maintenance costs. However, the company’s chemicals business saw a more than doubling of earnings, thanks to lower input costs and higher margins.
While global oil prices remained largely flat compared to a year ago, Exxon’s realized natural gas price was 32% lower. This was a key factor behind the weaker overall financial performance, as the company’s results were hit by the sharp drop in natural gas prices, which has also affected other major oil and gas firms like Chevron and TotalEnergies.
Despite the profit miss, Exxon’s results were still the second-highest for a first quarter in the past decade, behind the year-ago period. The company’s capital spending during the quarter was the lowest in seven quarters, and its ongoing streamlining efforts expanded structural cost savings by $400 million.
One bright spot for Exxon was its operations in Guyana, where its latest production vessel hit full capacity earlier than expected, contributing to a 70% year-over-year increase in output for the country, as highlighted by Hess, one of Exxon’s partners in the South American nation.