Exxon Mobil (XOM) -) posted weaker-than-expected second quarter earnings Friday as energy firms continue to navigate a year-on-year slump in global crude prices and a pullback in global demand.
Exxon said adjusted earnings for the three months ending in June were pegged at $1.94 per share, down 54% from the same period last year and well shy of the Street consensus forecast of $2.01 per share.
Group revenues, Exxon said, fell 28.3% to $82.92 billion, topping analysts' estimates of an $80.2 billion tally. Production was up by around 100,000 barrel of oil equivalent per day from last year to 3.8 million.
Earlier this month, Exxon said operating earnings will fall by around $7.8 billion compared to year's levels, with upstream profits down $2.2 billon.
Oil and energy firms, which reaped record profits last year amid the surge in crude prices that followed Russia invasion of Ukraine in February of 2021 and took WTI crude north of $100 per barrel, are now managing both a pullback in demand and global crude prices that are down around 30% from last year's levels.
“The work we've been doing to improve our underlying profitability is reflected in our second-quarter results, which doubled from what we earned in a comparable industry commodity price environment just five years ago,” said CEO Darren Woods.
“Earnings totaled more than $19 billion during the first half of the year, and we are on track to structurally reduce costs by $9 billion at year end compared to 2019," he added. "Production is up 20% year-over-year in Guyana and the Permian, and we are playing a leading role in the industry's energy transition with an agreement to acquire Denbury and with three world-scale CO2 offtake agreements."
Exxon shares were marked 1.8% lower in late-morning trading immediately following the earnings release to change handsa t $103.51 each.
Earlier this month, Exxon unveiled plans to buy carbon capture specialists Denbury in an all-stock deal that values the Plano, Texas-based group at around $4.9 billion.
Exxon said it would pay $89.45 per share for Denbury, a 2% premium to the group's Wednesday closing price, with investors receiving 0.84 shares of Exxon for each stock holding. The deal is likely to close in the fourth quarter of this year, Exxon said.
Denbury, Exxon said, owns the largest CO2 pipeline network in the United States, measuring some 1,3000 miles, with most of it in the biggest CO2 markets of Texas, Louisiana and Mississippi.
