Exxon Mobil Corp on Friday posted its first quarterly loss in three decades on plunging oil demand and collapsing prices, reporting a $610 million quarterly deficit after a nearly $3 billion inventory writedown.
Global fuel demand has tumbled by a third on coronavirus-related lockdowns and business shutdowns. Oil giants largely have reported losses on weaker margins and writedowns from an oil glut that has sent prices to historic lows.
All of Exxon’s businesses posted lower year-over-year profits or wider losses on declining prices and margins.
Despite a deep spending cut and its first quarterly loss since 1988, the company believes a growing global middle will ultimately lift demand.
“The long-term fundamentals that drive our business have not changed,” said Chief Executive Officer Darren Woods. However, he conceded, “It’s going to be a very challenging summer.”
Exxon’s results echoed those of rivals Royal Dutch Shell and BP, though Chevron reported a first-quarter profit gain due to asset sales.
The largest oil companies have largely sought to protect investor payouts by increasing borrowing or cutting expenses. Exxon, BP, and Chevron maintained their quarterly payouts while Shell cut its dividend for the first time since World War Two.
Exxon has cut this year’s project spending by $10 billion and expects to reduce oil and gas output by 400,000 barrel per day in line with rivals. Chevron also plans to cut as much as 300,000 bpd this month and up to 400,000 in June.
Exxon posted a loss of $610 million, or 14 cents per share, in the quarter, compared with a profit of $2.35 billion, or 55 cents per share, a year earlier.
Excluding charges, adjusted profit was 53 cents a share, beating Wall Street’s forecast for an adjusted profit of 18 cents.
Earnings from oil and gas production fell 91% from a year ago on weak oil prices. Exxon’s volumes were higher, with its U.S. shale production up 56% from a year-ago.
Its refining business swung to a $611 million operating loss on weak demand and inventory charges. Lower costs and gains from trading helped limit losses, the company said.
The chemical unit posted a profit of $144 million, down 75% from a year ago but up from a fourth-quarter loss.
“The downstream in particular came in ahead of our expectations,” wrote RBC Capital Markets analyst Biraj Borkhataria. The chemicals unit “was a better result than any time in 2019,” he added.
Its shares were down 3% at $45.03 in morning trading. The stock is down 34% this year.
Exxon’s production rose slightly to about 4 million barrels of oil equivalent per day (boepd) from 3.98 million boepd. A goal of producing 750,000 bpd from Guyana discoveries by 2025 would be pushed back a year, Exxon said.