Exxon Mobil Q1 Results to Reveal Impact of Weak Energy Prices, Refining Margins

Exxon Mobil's quarterly results will show the impact of weak energy prices and refining margins, according to UBS. The company's refining and distribution segment accounts for 76.9% of net sales, with petrochemicals making up 12.1%. Exxon is the worldwide leader in exploration and production of hydrocarbons, producing 2.9 million barrels of oil per day and 228.7 million m3 of natural gas per day.

Exxon Mobil (XOM) is expected to report its second-quarter earnings, revealing the impact of weak energy prices and refining margins, according to UBS. The company's refining and distribution segment, which accounts for 76.9% of net sales, is likely to be significantly affected by these factors. Petrochemicals, making up 12.1% of net sales, may also experience some challenges. Exxon Mobil is the worldwide leader in exploration and production of hydrocarbons, producing 2.9 million barrels of oil per day and 228.7 million m3 of natural gas per day.

Exxon Mobil anticipates a $1.5 billion decline in earnings for the second quarter compared to the first quarter, primarily due to weaker oil and gas prices. The upstream oil and gas production segment is expected to see a more than $1 billion hit from lower oil prices and a nearly $1 billion impact from weaker gas prices. However, the company expects higher refining margins to boost its earnings by about $300 million, offsetting some of the losses [1].

Despite the expected earnings decline, Exxon Mobil is likely to post industry-leading profitability. The company's structural cost savings program has been crucial in mitigating the impact of declining oil and gas prices, achieving $12.7 billion in cumulative savings since 2019, including $600 million in the first quarter alone. Exxon Mobil aims to achieve a total of $18 billion in savings by 2030, enhancing earnings resilience through efficiencies and high-return investments in its Permian and Guyana assets [2].

Exxon Mobil's upstream segment anticipates a year-over-year earnings decline of $800 million to $1.2 billion due to lower crude oil prices, with an additional $300 million to $700 million reduction from weaker natural gas prices. The Energy Products segment, which includes refining and fuels, is expected to see a modest earnings increase of $100 million to $500 million year-over-year in the second quarter, due to improved industry refining margins [3].

Exxon Mobil's earnings are expected to decline, highlighting the persistent impact of commodity price volatility. However, the company's long-term strategy aims to deliver the growth potential of $20 billion in earnings and $30 billion in cash flow by 2030 compared to 2024's baseline. This strategy involves continuing to invest in its advantaged assets and achieving a total of $18 billion in cost savings by 2030 [2].

References:
[1] https://finance.yahoo.com/news/exxons-profit-took-1-5-071400702.html
[2] https://www.gurufocus.com/news/2964353/exxon-mobil-faces-headwinds-from-declining-oil-prices-despite-production-gains
[3] https://www.aol.com/exxons-profit-took-1-5-071400195.html