Big Oil Profits to Take a Hit amid Lower Oil and Gas Prices Big Oil Companies
Big Oil companies Exxon Mobil Corp. (NYSE:XOM) and Chevron Corp. (NYSE:CVX) are both set to report a significant drop in second quarter profits when they return their quarterly scorecards on the 28th of July thanks to a sharp decline in oil and gas prices compared to a year ago.
Analysts expect Exxon to post Q2 2023 earnings per share (EPS) of $2.04, a huge 50.4% drop from EPS of $4.14 in the second quarter of 2022. The company’s earnings dropped to about $7.8 billion from $17.85 in the year-ago quarter in large part due to lower natural gas prices and weaker oil refining margins. Its revenue is expected to decline 31.8% year-over-year from $115.68 billion to $78.85 billion.
Exxon’s close peer, Chevron, is not expected to do much better, with the company telling investors earlier this week that it expects its 2Q earnings to drop by nearly 50% from the year-ago quarter.
In the company’s preliminary 2Q results released Monday, Chevron said it expects to report a profit of $6 billion for the quarter, good for a 48.3% year-over-year decline although ahead of Wall Street expectations per a Bloomberg survey of $5.5 billion.
Chevron expects to post an adjusted profit of $5.8 million or $3.08 per share, also better than the Street expectation of $2.97.
Meanwhile, U.S. gasoline futures have hit their highest in nearly nine months after an unplanned outage at Exxon Mobil’s Baton Rouge, Louisiana. The refinery is expected to keep a gasoline-making catalytic cracker down for several weeks, which is likely to lead to price increases as demand grows.
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The Baton Rouge refinery has two fluid catalytic cracker units of equal size and with a combined capacity of 243.5K bbl/day, with one unit reportedly shut since Thursday when it tripped offline.
