ExxonMobil's profit fell to its lowest level in the first quarter as energy prices faded
New York, May 2 (AP) ExxonMobil's first-quarter profit fell to its lowest level in years because of weaker crude oil prices and higher costs.
The oil and gas giants made $7.71 billion, or $1.76 per share, in the three months ended March 31. In the same period last year, it made $8.22 billion, or $2.06 per share.
The results exceeded Wall Street expectations, but ExxonMobil did not adjust the results of its report based on one-time events such as asset sales. Analysts surveyed by Zacks Investment Research expect earnings per share of $1.74.
Revenue totaled $83.13 billion, down from the $84.15 billion that analysts called for.
This week, a barrel of benchmark crude oil in the U.S. fell below $60, a level where many producers no longer make money.
“In this uncertain market, our shareholders are confident that we know we have built for it,” Chairman and CEO Darren Woods said in a statement Friday. “The work we have done to change the company’s work has made us outstanding in any environment.”
According to Factset, crude oil has dropped by nearly 18% by nearly 18%.
Oil prices fell last month, and economic growth slowed down due to a booming trade war, falling to a four-year low.
Trump announced high tariffs on nearly all U.S. trading partners, and then reversed himself a few days after the market collapsed, suspending import taxes for 90 days. Amid uncertainty among U.S. consumers and businesses, the Commerce Department said Wednesday that the U.S. economy fell for the first time in three years from January to March.
The rapid decline in oil prices indicates pessimism about economic growth, and as manufacturers cut production, businesses cut costs of travel and families reconsider vacation plans may be a harbinger of a recession.
And, there seems to be little interest in closing some of the world's largest producers.
In December, eight members of the OPEC coalition, oil exporter, showed that they would not cut production when competing with production from non-universal oil producers.
OPEC members decided at the time to extend production, which was scheduled to take effect on January 1. The plan is to gradually recover 2.2 million barrels per day starting in 2025.
The process is pushed back to April 1, and the growth in production will gradually occur within 18 months until October 2026.
ExxonMobil shares rose slightly before the market opened. (AP)SCY SCY
