Exxon Mobil Corp. (XOM) has suffered its worst share price drop since October last year. XOM shares lost up to 4.2% of their value during Friday’s trading.
Exxon Mobil Price Drops As Refining Costs Increase
This fall occurred on the same day that the S&P 500 was generally on the up following solid profit reports from big names such as Microsoft Corp (MSFT) and Alphabet Inc. (GOOG). Reports concerning how increasing maintenance costs are eating into the company’s oil-refining profits caused the share price to fall. It was the worst day for XOM since it confirmed its $60bn takeover of Pioneer Natural Resources Co. (PXD) six months ago.
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Exxon Mobil posted an adjusted profit per share of $2.93 for Q1. Among the positive news, the company said that its crude oil output was close to two million barrels per day, better than anticipated. The company also confirmed that its project in Guyana was reaping dividends, with over 35% growth. Cash flow was impressive, with $1bn more than expected, giving a total of $14.7bn.
However, higher refinery costs, unsettled derivative contracts and falling production in the US were among the negative issues reported. CFO Kathy Mikells explained these matters, saying:
This quarter we had a number of small ones that added up together to be more significant, and that’s difficult for analysts to model.
Analysts had expected Exxon Mobil to post strong results as it appeared well-positioned to benefit from investors looking to invest in production growth. The deal to buy Pioneer remains on the table, with the Federal Trade Commission expected to approve the takeover in the next quarter.
