(Reuters) – Exxon Mobil shares fell practically 2% in early buying and selling on Wednesday after the highest U.S. oil producer warned of a decline in refining earnings within the fourth quarter and weak returns throughout its operations.
The earnings snapshot from the business bellwether signaled a difficult atmosphere as firms grapple with pricing strain amid demand volatility.
Exxon expects fourth-quarter earnings to be decrease by about $1.75 billion from the prior quarter.
For a lot of final yr, Exxon and different oil majors confronted diminished profitability from refining crude oil and promoting petroleum merchandise as a post-pandemic growth in demand ended. The opening of huge crops world wide additionally weighed on refining margins development.
Within the third quarter, Exxon’s earnings fell 5% than the year-ago quarter, whereas Chevron’s tumbled 21%.
Exxon’s earnings replace is “according to revisions seen for unbiased refiners and different majors with heavy refining publicity,” mentioned Biraj Borkhataria, an oil analyst with RBC Capital Markets, in a be aware to traders.
The snapshot will probably be seen as a “adverse” and weigh on the shares within the close to time period, he added.
Exxon is without doubt one of the world’s largest refiners with a complete world refining capability of 4.5 million barrels of oil per day and can also be one of many world’s largest producers of commodity and specialty chemical compounds.
The corporate is predicted to ship a revenue of $1.76 per share within the fourth quarter, in accordance with information compiled by LSEG. The oil main posted earnings of $2.48 per share a yr earlier.
Exxon has a price-to-earnings (PE) ratio of 13.56 in comparison with Chevron’s 16.43. A decrease PE a number of signifies a extra engaging funding alternative.
Exxon’s shares rose 7.6% in 2024, underperforming the S&P 500’s 23.3% acquire.
(Reporting by Mrinalika Roy in Bengaluru; Enhancing by Sriraj Kalluvila)
