Exxon Mobil Stock Declines as Q1 Earnings Exceed Forecasts, CEO Notes Ongoing Oil Price Concerns

Exxon Mobil Beats Earnings Expectations Despite Global Supply Chain Disruptions

Exxon Mobil, one of the world's largest energy companies, exceeded analyst expectations for adjusted earnings in the first quarter of 2023, driven by increased production in Guyana and the Permian Basin. However, the company's unadjusted profits fell to a five-year low due to global supply chain interruptions caused by the conflict in Iran.

According to the company's latest financial report, Exxon Mobil's shares dipped over 1% during morning trading on Friday, with the stock trading down by 1.23% or $1.90 at $152.43 at 1:26 p.m. EDT. Despite this decline, the stock has still managed to rise by over 24% year-to-date.

The company's adjusted earnings for the first quarter reached $1.16 per share, surpassing the analyst consensus of $1.00. In contrast, net income plummeted to $4.2 billion, its lowest point since early 2021 and a significant decline from the $7.7 billion recorded in the same period last year.

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Note: The adjusted earnings and net income for BP, Total, and Chevron are not provided in the original text and are therefore not included in the table.

The Middle East hostilities have had a significant impact on global oil prices, which have risen well beyond $100 per barrel. However, the financial impact on energy giants has been inconsistent, with Exxon Mobil experiencing a decline in output due to its high exposure to the Middle East region. In contrast, European competitors like BP and Total have reported increased profits driven by their trading arms.

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Chevron, the second-largest U.S. producer, has noted that less than 5% of its output originates from the Middle East region, making it less vulnerable to supply chain disruptions.

Exxon Mobil's CEO, Darren Woods, cautioned that energy prices could continue their upward trajectory, noting that supply disruptions have only been partially mitigated by tapping into existing inventories. Woods also warned that even if the critical Strait of Hormuz were to reopen, it would likely take one to two months for normal shipping flows to fully resume.

The company's total worldwide production for the quarter was 4.59 million barrels of oil equivalent per day (boepd), a slight year-over-year increase but a nearly 8% drop from the 5 million boepd produced in the fourth quarter. Exxon Mobil projected that if the Strait of Hormuz remains closed for the rest of the second quarter, production could slide further to between 4.1 million and 4.3 million boepd, reflecting a 750,000 bpd reduction in Middle Eastern output compared to 2025. However, if the strait reopens immediately, second-quarter output could reach 4.7 million boepd.

The company's adjusted figures notably exclude a $700 million loss attributed to undelivered cargoes resulting from the unprecedented supply crisis that began in late February. Woods reaffirmed that the corporation remains committed to its strategic focus on high-quality production assets.

"The conflict in the Middle East contributed to a highly volatile operating environment. Supply tightened. Logistics became more complex. Markets moved quickly. That kind of environment does not change our strategy, it proves its effectiveness," Woods said in prepared remarks.

Exxon Mobil is also working to repair two damaged LNG facilities in Qatar, which represent a substantial part of the company's liquefied natural gas portfolio. The company is collaborating with operator QatarEnergy to explore methods for accelerating necessary repairs.