Exxon Mobil's stock falls after profit and production drop below forecasts

By Tomi Kilgore

Earnings took a hit from falling refining margins and natural-gas prices

Shares of Exxon Mobil Corp. dropped more than 3% Friday after the oil and gas giant reported first-quarter profit and production that fell below forecasts, even as revenue beat expectations by a wide margin.

Also weighing on the bottom line: Overall costs and other deductions increased, while revenue declined.

The stock (XOM) slumped 3.4%, on track to snap a five-day winning streak and hovering around its lowest price since April 1, when it closed at $116.99.

Net income in the first quarter dropped to $8.22 billion, or $2.06 a share, from $11.43 billion, or $2.79 a share, in the same period a year ago, as industry refining margins declined and natural-gas realizations sank 32%.

Revenue fell 4% to $83.08 billion, above the FactSet consensus of $79.69 billion.

"While shy of sell-side estimates, Exxon's [first-quarter] results show continued execution and improved unit-level profitability versus prior cycles," Justin Jenkins at Raymond James said in a note.

Strategic areas such as Exxon's Guyana fields and West Texas Permian holdings remain on track, and the pending acquisition of Pioneer Natural Resources "is set to further transform the Permian footprint, all while optimization continues to unfold in a positive direction," he said.

Alastair Syme at Citi struck a similarly positive note. While the results were about 7% below market expectations, Exxon's financial leverage "remains towards the lower end of the peer range, giving a resilience to current plans around shareholder distributions as well as supporting future investment/growth ambitions," Syme wrote.

Exxon reported total costs and other deductions that rose 1.4% to $70.71 billion, as crude oil and product purchases rose 3.5% to $47.6 billion and depreciation and depletion increased 13.4% to $4.81 billion. Production and manufacturing expenses fell 3.7% to $9.09 billion.

Within upstream volumes, production fell 1.2% to 3,784 thousand oil-equivalent barrels per day, to miss the FactSet consensus of 3,810 koebd.

Net production of crude oil, natural-gas liquids, bitumen and synthetic oil rose 2.5% to 2,557 koebd, while net natural-gas production available for sale declined 8.2% to 7,362 million cubic feet per day.

The stock has run up 21.4% year to date through Thursday, while the Energy Select Sector SPDR exchange-traded fund (XLE) has climbed 15.3% and the S&P 500 has gained 5.8%.

Claudia Assis contributed.

-Tomi Kilgore

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

04-26-24 1153ET

Copyright (c) 2024 Dow Jones & Company, Inc.