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Lower oil and gas prices could reduce Exxon Mobil’s (NYSE:XOM) Q2 earnings by ~$1.5B from the previous quarter, the company said post-market Monday in an SEC filing.
Exxon (NYSE:XOM) said declining liquids prices, which include crude oil and condensate oil, could reduce its Q2 upstream earnings by $800M-$1.2B compared with Q1, and changes in natural gas prices could chop earnings by $300M-$700M; the combined midpoint of the forecast equals $1.5B.
Q2 benchmark Brent crude prices fell 11% Q/Q to average $66.71/bbl, while natural gas prices dropped 9% Q/Q.
Timing effects, which relate mostly to unsettled derivatives, could hurt upstream earnings by up to $300M or improve them by as much as $100M, the filing said.
The company said it expects some help from refining margins, which are seen adding $100M-$500M to earnings, although the guidance refers only to market pricing and does not factor in operational performance such as changes to production or costs.
Exxon’s (XOM) guidance was in line with analyst expectations for Q2, RBC Capital analyst Biraj Borkhataria said in a note, adding that the company “has a much smaller trading organization than its European peer Shell, and thus was not impacted by the same issues.”
Shell slid nearly 3% on Monday after warning of “significantly lower” Q2 trading earnings than in the previous quarter.
In Q1, Exxon (XOM) posted profits totaling $7.7B, including $6.8B from upstream earnings.