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Exxon Mobil’s Q2 beats lowered expectations
Relentless OPEC+ production and softness in the global economy have kept oil prices — and stocks — low this year.
Exxon reported better-than-expected Q2 earnings and sales early Friday, having warned weeks ago that soft prices would crimp profits, but the company’s shares still dipped in early trading.
The largest US oil producer reported:
Earnings per share of $1.64 vs. consensus estimates for $1.57 per share.
Sales of $81.51 billion vs. expectations for $80.70 billion, per FactSet data.
Stock buybacks worth $5 billion, putting it on track to meet its $20 billion goal for repurchases this year.
Like others in the energy sector, Exxon has been squeezed by lackluster global demand — demand growth this year is expected to be the weakest, outside of Covid, since the Great Recession in 2009 — and surging production from OPEC, the global cartel, and in particular from Saudi Arabia. Exxon warned in early July that those dynamics would weigh on Q2 earnings.
The result? Oil prices that are roughly 10% lower than this time last year and about 15% lower than two years ago. And energy stocks have, understandably, underperformed.
Exxon was down about 5% over the last year, through the close of trading Thursday. The energy sector of the S&P 500 was down 5.4%, compared to a 16% gain for the S&P 500. Out of the 11 “sectors” of the index, only healthcare did worse than energy, dropping 13%.
