New York, May 2 (AP) Exxon Mobil’s first quarter profit slumped to the lowest level in years, stung by weaker crude prices and higher costs.
The oil and gas giant earned $7.71 billion, or $1.76 per share, for the three months ended March 31. It earned $8.22 billion, or $2.06 per share, in the year-ago period.
The results topped Wall Street expectations, but Exxon does not adjust its reported results based on one-time events such as asset sales. Analysts polled by Zacks Investment Research expected earnings of $1.74 per share.
Revenue totalled $83.13 billion, which fell short of the $84.15 billion that analysts were calling for.
This week, a barrel of US benchmark crude fell below $60, a level at which many producers can no longer turn a profit.
“In this uncertain market, our shareholders can be confident in knowing that we’re built for this,” Chairman and CEO Darren Woods said in a statement Friday. “The work we’ve done to transform our company over the past eight years positions us to excel in any environment.”
Crude oil is down nearly 18% for the year to date, according to FactSet.
Oil prices plummeted last month, at one point sinking to a four-year low in anticipation of slowing economic growth due to a burgeoning trade war.
Trump announced far-reaching tariffs on nearly all US trading partners April 2 and then reversed himself a few days later after a market meltdown, suspending the import taxes for 90 days. Amid the uncertainty for both US consumers and businesses, the Commerce Department said Wednesday that the US economy shrank 0.3% from January through March, the first drop in three years.
Rapidly falling oil prices signal pessimism about economic growth and can be a harbinger of a recession as manufacturers cut production, businesses cut travel costs and families rethink vacation plans.
And there appears to be little appetite for turn off the spigots by some of the world’s largest producers.
In December eight members of the OPEC alliance of oil exporting countries signaled they would not cut production as they compete with production from non-allied oil producing countries.
The OPEC members decided at the time to postpone production increases that had been scheduled to take effect Jan 1. The plan had been to start gradually restoring 2.2 million barrels per day over the course of 2025.
That process was pushed back to April 1 and production increases will gradually take place over 18 months until October 2026.
Shares of Exxon Mobil rose slightly before the market open. (AP) SCY SCY
