Exxon, Chevron Post Stronger-than-Expected Profit on Back of Oil Price Surge

Oil Giants Exxon and Chevron Post Stronger-Than-Expected Earnings Amid Iran War

Exxon Mobil Corp. and Chevron Corp. have reported stronger-than-expected earnings for the first quarter, as higher oil and natural gas prices more than offset production outages caused by the Iran war. According to the companies' latest financial reports, Exxon's earnings were boosted by $1.7 billion due to surging energy prices, while Chevron's per-share profit surpassed every estimate from analysts.

Exxon's first-quarter earnings of $4.9 billion, or $1.16 a share, were 20 cents higher than the average analyst per-share estimate in a Bloomberg survey. Chevron, on the other hand, reported adjusted per-share profit of $1.41, or 51 cents higher than expected. Both companies benefited from surging prices for crude and gas, as well as growth from new projects and acquisitions.

Despite the positive earnings reports, both Exxon and Chevron warned that the outlook for the rest of the year is uncertain due to the ongoing conflict in the Middle East. The Strait of Hormuz, a critical waterway for oil exports, remains blocked, and the companies' production and sales have been affected as a result.

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Comparison of First-Quarter Earnings

Chevron's earnings were boosted by strong trading results and swelling prices for real-world oil from places such as Kazakhstan. The company's Chief Financial Officer, Eimear Bonner, attributed the outsized earnings to fat margins from processing the company's own crude through refineries.

Exxon, while less exposed to Middle East disruptions, saw its production dip roughly 5% on a sequential basis. However, the company's shares dropped 0.8% in New York trading, while Chevron fell 1%.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Share Repurchases

Exxon and Chevron have also been active in share repurchases, with Exxon buying back $4.9 billion of shares during the quarter and affirming its intention to repurchase $20 billion worth of stock this year. Chevron, meanwhile, bought back $2.5 billion of stock, 16% less than the previous period.

Acquisitions and Production

Chevron's $60 billion acquisition of Hess, combined with growing production from the US Gulf of Mexico and the Permian Basin, ensured that Chevron's production was higher than a year ago, more than offsetting outages in Israel, the partitioned zone between Saudi Arabia and Kuwait, and Kazakhstan.