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Exxon Q1 Earnings Miss Despite Oil Price Rally

Exxon Papua LNG

Despite the fact that higher crude oil prices helped ExxonMobil (NYSE:XOM) to lift its Q1 earnings, the U.S. supermajor on Friday missed Wall Street expectations and reported its weakest production level for a first quarter since 1999.

After the results release, Exxon’s shares fell more than 2 percent in pre-market trade at 08:39 a.m. EDT. By 3:00pm, shares were down almost 4 percent.

Exxon reported today Q1 earnings of US$4.650 billion, up 16 percent on the year. Earnings per common share increased 15 percent to US$1.09, but missed analyst expectations ranging from US$1.10 from WSJ’s analyst to US$1.14, or a 20-percent expected increase, from Investor’s Business Daily.

In terms of revenues, Exxon beat the Wall Street view, reporting US$68.211 billion in total revenues for Q1, up from US$58.671 billion in Q1 2017. Analysts had expected the Q1 2018 revenue at around the mid-$60-billion range.

Exxon’s oil-equivalent production was 3.9 million barrels per day in the first quarter this year, down by 6 percent compared to the first quarter of 2017. Excluding entitlement effects and divestments, oil-equivalent production was down 3 percent from Q1 last year. The Q1 2018 production was the lowest for a first quarter since the 1999 merger that created what is today known as Exxon, Bloomberg notes. The production level was also lower than all seven analyst estimates in a Bloomberg survey.

Related: Oil Markets React Stoically To Rising Rig Count

Exxon highlighted in its results release that it posted its highest cash flow from operations and asset sales—US$9.960 billion—since 2014, the year in which oil prices started tumbling and started eroding the earnings and margins of the major oil companies.

“Increased commodity prices, coupled with a focus on operating efficiently and strengthening our portfolio, resulted in higher earnings and the highest quarterly cash flow from operations and asset sales since 2014,” Darren W. Woods, chairman and chief executive officer, said, commenting on Exxon’s Q1 results.

In terms of revenues, Exxon managed to take advantage of the higher oil prices, but its profits came in below estimates, unlike the European majors that have reported Q1 financials so far—Shell, Statoil, Total—which posted their highest net profits since 2014 when oil prices were $100 a barrel.

By Tsvetana Paraskova for Oilprice.com

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