Shares of global energy major Exxon Mobil (NYSE:XOM) are under pressure today after its first-quarter profits missed estimates amid lower natural gas prices and pressured margins.
Exxon’s Weak Q1 Numbers
During the quarter, Exxon’s revenue declined by 4% year-over-year to $83.08 billion. Still, the figure outpaced expectations by $3.39 billion. In contrast, its EPS of $2.06 fell short of estimates by $0.13. In comparison, Exxon had generated an EPS of $2.83 in the year-ago period.
This drop in the company’s bottom line was attributable to a drop in natural gas prices and soft refining margins. In Q1, Exxon’s upstream earnings declined by $797 million to $5.7 billion, owing to lower natural gas realizations. In Energy Products, earnings declined by $2.8 billion to $1.4 billion due to weak refining margins and unfavorable mark-to-market effects from derivative transactions.
Separately, Exxon has declared a quarterly cash dividend of $0.95 per share. The XOM dividend is payable on June 10 to investors of record on May 15.
Exxon Is Ramping Up Guyana Operations
Simultaneously, Exxon is ramping up its operations in Guyana. The company achieved quarterly gross production of over 600,000 oil-equivalent barrels a day in Guyana and is preparing to develop its sixth offshore project in the country. The project is expected to increase Exxon’s gross capacity by nearly 250,000 oil-equivalent barrels a day, with the start of operations estimated by the end of 2027.
XOM’s Merger with PXD
Additionally, Exxon expects its $59.5 billion merger with Pioneer Natural Resources (NYSE:PXD) to close in the second quarter.
Is XOM Stock a Buy, Sell, or a Hold?
Exxon’s share price has rallied by nearly 22.5% so far this year. Overall, the Street has a Moderate Buy consensus rating on the stock, alongside an average XOM price target of $125.31. However, analysts’ views on Exxon could see changes following today’s earnings report.
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