Stock Drops 1% Pre-market
Exxon Mobil Corp.’s stock (XOM) fell 1% premarket Friday, following disappointing profit results for the second quarter. The oil giant reported a net income of $7.88 billion, or $1.94 a share, compared to $17.850 billion, or $4.21 a share, in the same period last year. Revenue also decreased from $115.7 billion to $82.9 billion year on year. Analysts had anticipated earnings per share (EPS) of $2.03 and revenue of $81.803 billion, according to FactSet consensus.
Factors Affecting Earnings
Exxon attributed the decline in earnings to lower natural gas realizations and industry refining margins. However, the negative impact was somewhat offset by increased production in the Guyana and Permian basins.
Structural Cost Reductions
Chief Executive Darren Woods expressed confidence in Exxon’s ability to reduce costs structurally, with a target of $9 billion in savings by year-end compared to 2019. Woods highlighted the successful performance of the company’s three new central organizations: global business solutions, ExxonMobil supply chain, and global trading.
Stock Performance
Exxon’s stock has experienced a 4.4% decline year to date, while the S&P 500 has gained 18%.
