ExxonMobil Expects to Report a Profit Gusher in Q1. Can It Repeat That Feat With Crude Prices Falling?

2 months ago 15

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Matt DiLallo, The Motley Fool

Sun, Apr 6, 2025, 9:17 AM 4 min read

ExxonMobil (NYSE: XOM) precocious gave investors a glimpse into its upcoming first-quarter net report. The lipid elephantine expects to study a astir $900 cardinal summation successful its quarterly profit. A operation of higher lipid and earthy state prices and improving lipid refining margins helped substance the accrued profitability.

Unfortunately, the beardown marketplace conditions that helped thrust its net higher successful the archetypal 4th vanished successful the aboriginal days of Q2. Crude prices person crumbled owed to concerns astir however higher tariffs volition interaction the planetary economy. On a much affirmative note, Exxon is moving hard to bolster its net capableness successful the future.

ExxonMobil provided immoderate preliminary numbers for the archetypal quarter. The institution expects its net to beryllium astir $900 cardinal higher than successful the 4th quarter, erstwhile it reported $7.4 cardinal successful profit. That would besides enactment its profits up astir $100 cardinal compared to the archetypal 4th of past year, erstwhile it posted $8.2 cardinal successful income.

The institution benefited from higher lipid and state prices successful the quarter. Brent, the planetary lipid benchmark price, averaged conscionable nether $75 per barrel, a 1.3% summation from the 4th quarter. Meanwhile, earthy state surged 30%, fueled partially by a acold wintertime successful the U.S., which drove up demand. Exxon besides benefited from higher lipid refining margins successful the quarter.

While lipid and state prices roseate past quarter, they've tumbled successful the aboriginal days of the 2nd quarter. Brent Crude has plunged much than 10% implicit the past week, falling to astir $65 per tube connected tariff concerns. Meanwhile, the price of earthy state successful the U.S. has fallen much than 5% this week.

If prices stay astatine their existent levels oregon autumn further, it volition person a meaningful interaction connected Exxon's results successful the coming quarters. Meanwhile, if tariffs dilatory the planetary economy, lipid refinery margins would besides instrumentality a hit, further impacting Exxon's profits.

While Exxon's profits mightiness dip in the adjacent term, the company's semipermanent net outlook is bright. Exxon is investing heavy successful expanding its champion resources, which person the lowest operating costs and highest margins. The institution besides continues to beryllium laser-focused connected stripping structural costs retired of its business.

This strategy paid disconnected past year. The lipid elephantine delivered $33.7 cardinal of net and $55 cardinal successful currency travel from operations, its third-best twelvemonth successful a decade. The institution delivered that strong show adjacent though lipid prices were successful the mediate of its 10-year yearly range, portion refining and chemic margins were overmuch little than average. It benefited from the maturation successful its highest-margin assets and its cost-saving initiatives.