News Wires — Exxon Mobil Corp on Friday reported a 49 percent fall in first-quarter profit that missed forecasts due to weakness across its major businesses that showed the turnaround at the company remains a work in progress.
The largest U.S. oil producer posted its first loss in its refining business since 2009 on higher maintenance costs and reported lower profits in chemicals and oil and gas.
“It was a tough market environment for us this quarter,” Exxon Senior Vice President Jack Williams said on a call with analysts.
First-quarter profit fell to $2.35 billion, or 55 cents a share, from $4.65 billion, or $1.09 a share, a year ago.
Cash flow from operations of $8.3 billion was offset by capital spending and dividend payments of $10.4 billion.
“They had a large $2 billion cash flow shortfall that I don’t think investors will be comfortable with,” said Jennifer Rowland, analyst with Edward Jones.
Exxon continues to spend heavily to boost its oil and gas output, which had been on a years-long slide. Chief Executive Darren Woods has said he believes the company has an opportunity to invest even as peers have focused more on improving cash flow and share buybacks.
Shares were down about 2.4 percent in late morning trading on Friday.
Analysts had expected Exxon to earn 70 cents per share, according to Refinitiv Eikon estimates.
Maintenance and production curtailments in its Canadian oil production, as well as weak oil and natural gas prices, pushed profits down in its oil and gas unit by 10.3 percent, the company said.
“Clearly, the corner is further away than we expected and we expect this to lead to underperformance in the near term,” RBC Capital Markets said in a client note.
Exxon’s oil and gas production rose 2 percent overall to 4 million barrels per day (bpd), up from 3.9 million bpd in the same period the year prior.
The company’s growing output in the Permian Basin, the largest U.S. shale basin, was a bright spot, rising to 226,000 barrels of oil equivalent per day (boepd) in the first quarter.
It said it remains on track to produce 1 million boepd by 2024. Rivals Chevron Corp and Occidental Petroleum Corp are battling to take over Anadarko Petroleum Corp .
“I would be surprised if over time we did not pick up some more Permian acreage,” Williams said when an analyst asked about possible acquisitions, but added that Exxon “doesn’t need to.”
Exxon’s refining business lost $256 million in the first quarter, compared with a profit of $940 million in the same period last year.
Its chemicals business earned $518 million, down 53 percent from profits of $1.1 billion during the same period last year, while its upstream business, which pumps oil and gas, had a profit of $2.9 billion, down 18 percent.