ExxonMobil's Q1 Profits More Than Double on Strong Demand and Cost-Cutting Measures
ExxonMobil, the US-based oil giant, has announced that its profits more than doubled in the first three months of this year, reaching a record $11.4bn (£9.1bn), up from $5.5bn a year earlier. This significant jump was attributed to increased demand for oil and gas and the company's cost-cutting measures. ExxonMobil's profits surpassed analysts' expectations, despite falling oil prices and a $200m hit from windfall taxes paid in Europe.
Chevron, another US oil firm, also reported an increase in profits for the same period, making nearly $6.6bn, up 5% from a year ago. However, it paid a $130m "energy profits levy" or windfall tax in the UK. The first-quarter results of Shell and BP are set to be released next week.
ExxonMobil's increase in profits included a $3.4bn after-tax reduction to exit Russia. "We delivered a first-quarter record despite the fact that energy prices and refining margins are softening a bit," said chief financial officer Kathryn Mikells.
The company's strong production growth, driven by the start-up of new offshore developments and refining facilities, was the biggest contributor to the better-than-expected earnings. ExxonMobil's oil and gas production was the highest since 2019, with surging oil production in Canada being the key driver. However, profitability was dragged lower by the collapse in US natural gas prices.
ExxonMobil's refining business continued to be a "star performer", delivering earnings of more than $4bn for the fourth consecutive quarter, according to industry analyst Peter McNally at Third Bridge research firm.
Despite its impressive performance, ExxonMobil is currently involved in a legal dispute with the European Union over a new windfall tax on oil firms. The company has accused Brussels of exceeding its legal authority and called the measure "counter-productive". ExxonMobil and other players in the sector have argued that the tax would discourage investment.
ExxonMobil`s robust overall economic performance comes amid ongoing scrutiny of the oil and fuel industry's function in contributing to weather change. The business enterprise has confronted grievance for its loss of motion on decreasing carbon emissions, with activists and traders pressuring the corporation to take extra motion to deal with weather change.
In response, ExxonMobil has pledged to reduce emissions from its operations and products, aiming to emerge as a net-0 emitter through 2050. The business enterprise is likewise making an investment in renewable power sources, such as wind and sun power, because it seeks to diversify its power portfolio.
ExxonMobil's documented first-region earnings are probably to attract renewed interest in the oil and fuel industry's profitability, at a time while many governments and traders are pushing for a transition to cleaner power sources. The business enterprise's effects may also be intently watched by different power firms, as they put together to launch their very own Q1 profits reports.