Big Oil companies Exxon Mobil Corp. (NYSE:XOM) and Chevron Corp. (NYSE:CVX) are both set to report a significant drop in second quarter profits when they return their quarterly scorecards on the 28th of July thanks to a sharp decline in oil and gas prices compared to a year ago.
Analysts expect Exxon to post Q2 2023 earnings per share (EPS) of $2.04, a huge 50.4% drop from EPS of $4.14 in the second quarter of 2022. The company's earnings dropped to about $7.8 billion from $17.85 in the year-ago quarter in large part due to lower natural gas prices and weaker oil refining margins. Its revenue is expected to decline 31.8% year-over-year from $115.68 billion to $78.85 billion.
Exxon's close peer, Chevron, is not expected to do much better, with the company telling investors earlier this week that it expects its 2Q earnings to drop by nearly 50% from the year-ago quarter.
In the company's preliminary 2Q results released Monday, Chevron said it expects to report a profit of $6 billion for the quarter, good for a 48.3% year-over-year decline although ahead of Wall Street expectations per a Bloomberg survey of $5.5 billion.
Chevron expects to post an adjusted profit of $5.8 million or $3.08 per share, also better than the Street expectation of $2.97.
Meanwhile, U.S. gasoline futures have hit their highest in nearly nine months after an unplanned outage at Exxon Mobil's Baton Rouge, Louisiana. The refinery is expected to keep a gasoline-making catalytic cracker down for several weeks, which is likely to lead to price increases as demand grows.
The Baton Rouge refinery has two fluid catalytic cracker units of equal size and with a combined capacity of 243.5K bbl/day, with one unit reportedly shut since Thursday when it tripped offline.
By Alex Kimani for Oilprice.com
Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. More