Exxon Mobil Corp stated on Monday that its first-quarter earnings could set a seven-year high, with operating income from oil and gas production alone reaching $9.3 billion.
Operating income from oil and gas, the firm’s largest segment, might increase by as much as $2.7 billion over the previous quarter’s $6.6 billion, according to a glimpse of the largest US energy firm’s quarter that ended March 31.
Exxon does not insure or hold in oil sales, therefore its results are normally in line with energy price fluctuations. Oil prices rose 45 percent in the fourth quarter of 2021, to an equivalent of $114 a barrel, the most in seven years, as a result of Putin’s invasion of Ukraine.
According to Scotiabank’s worldwide equity analysis, overall profits for the quarter are expected to be around $9.8 billion at the midpoint of Exxon’s expectations.
Exxon shares increased marginally to $83.16 on Monday, bringing their year-to-date gain to 36 percent. According to a securities report, the official results will be revealed on April 29.
According to Scotiabank researcher Paul Cheng, the forecast indicates adjusted earnings of roughly $2.29 per share. Exxon would gain at its best quarterly level since 2014.
The record oil and gas profits are a foretaste of what is to come for other companies’ oil revenues. Such findings could bolster arguments for windfall profit taxes on energy firms by legislators in the United States and the European Union.
Exxon’s services in Russia may have an unfavorable influence on the overall result. Last month, the Exxon said that it would withdraw out of Russia due to the conflict in Ukraine. The oil company’s assets are worth $4 billion, and output and income are expected to drop by 1% to 2% as a result of the relocation.
In a document, it stated that based on the conditions of its departure from Sakhalin, the business may be compelled to damage its investment in the project up to the complete valuation.
Following Russia’s invasion, sanctions on its oil, LNG, and coal pushed up oil and gas prices. In the first quarter, worldwide oil prices reached a 14-year high, but have subsequently fallen as the US declared the release of emergency reserves and China imposed a lockdown.
Operating earnings in refining might be $300 million more than the $1.5 billion obtained in the fourth quarter, whereas earnings in the chemicals division could be $300 million lower than the $1.3 billion received the previous quarter.