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Exxon Misses Earnings Estimate With 56% Profit Decline

ExxonMobil (NYSE: XOM) missed analyst forecasts as it reported on Friday 56% lower earnings for the second quarter amid lower natural gas prices and weaker refining margins.

Exxon reported on Friday second-quarter 2023 earnings of $7.9 billion, or $1.94 per share assuming dilution. This was down from a record $17.85 billion profit for the second quarter of 2022 when oil and gas prices surged after the Russian invasion of Ukraine.

Exxon’s earnings per share for the second quarter this year missed the analyst consensus estimate of $2.03 EPS compiled by The Wall Street Journal.

Early this month, Exxon already flagged it expects sharply lower second-quarter earnings, due to low natural gas prices and lower refining margins.

And so it did, but even with the profit warning, Exxon missed the already downgraded analyst consensus estimates.  

Upstream second-quarter earnings were $4.6 billion, down by $1.9 billion from the first quarter and more than halved from $11 billion earnings in the upstream business for the second quarter of 2022. The main factors for the lower upstream earnings were lower natural gas prices, which slumped by 40% in Q2, and seasonally higher scheduled maintenance, Exxon said.

The supermajor’s refining business booked earnings of $2.3 billion, down from $4.2 billion for the first quarter and $5.3 billion for the second quarter of 2022.

“Industry margins declined sequentially from a strong first quarter on weaker diesel margins as Russian supply concerns eased,” Exxon said.

Exxon achieved record quarterly production in the Permian and in Guyana, its top development focus areas for this decade. Oil-equivalent production in Guyana and the Permian jumped by a combined 20% in the second quarter compared to the same quarter of 2022.

“In the Permian, we set another production record and remain on track for an overall growth in production of 10% this year,” CEO Darren Woods said in prepared remarks on the earnings call.

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Higher Permian and Guyana production, however, was not enough to offset lower price realizations and weakening refining margins, and Exxon joined the other supermajors in reporting lower earnings and also joined European majors Shell and TotalEnergies which missed analysts’ forecasts, too.

By Tsvetana Paraskova for Oilprice.com

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  • George Doolittle on July 28 2023 said:
    Prospects for XOM going forward have never looked better short $XOM strong sell on execution risk for this.

    Long $shell former Royal Dutch Shell. Long $SLB Slumberger both strong buy long $kmi Kinder Morgan Energy strong buy as well. US energy market very strong here for some time now irregardless of what tis going on in either Russia or the Middle East although certainly there is that.

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