The Numbers
Exxon’s revenue declined in the latest quarter, to $82.9 billion from $115.7 billion a year earlier. The company reported earnings per share of $1.94, compared with $4.21 in the second quarter last year.
Exxon’s reduced profit is relative to the unusual level achieved in a roiled energy market a year ago. It is higher than the second-quarter profit of $4.7 billion in 2021.
Other energy companies have also reported declining income. Chevron, the second-largest American oil company, said on Sunday that its second-quarter income was $6 billion, down from $6.6 billion in the first quarter and nearly a 50 percent decline from a $11.6 billion profit in the second quarter of last year.
Shell, the largest European energy company, on Thursday announced a second-quarter profit of $5.07 billion, down 56 percent from last year.
Notable: Record production in the Permian Basin and in Guyana.
Darren Woods, Exxon’s chief executive, said on a conference call with investment analysts that he was pleased with the results, pointing out that the company’s earnings were nearly twice what it made in the second quarter of 2018, an environment that he said had “comparable industry commodity prices.”
“That doubling of earnings reflects our work in the intervening years to reshape our portfolio of businesses, invest in advanced projects and drive a higher level of efficiency and effectiveness in everything we do,” Mr. Woods said.
Exxon also announced record production efforts in the Permian Basin of Texas and New Mexico, where, Mr. Woods said, the company is on track for overall growth of 10 percent this year, and in Guyana, where the company set a quarterly gross production record of 380,000 barrels per day.
But Mr. Woods emphasized that the company would be cost-conscious. “We remain on track to reach our target of $9 billion in savings by the end of this year,” he said. “As we develop plans for future years, we’re committed to finding additional savings.”
Quotable: ‘A much more constrained environment.’
Roger Read, a senior energy analyst at Wells Fargo, said energy companies had gotten more careful in recent years about expanding during periods of high prices. These days, the refrain from executives is that “we’re not going to assume that just because prices are stronger this year, that they have to be stronger every year thereafter,” Mr. Read said. “And so the companies are living in a much more constrained environment.”
Background: Energy markets have settled down.
Exxon’s reduced profit is a sign that the global energy market has stabilized since it was upended by Russia’s invasion of Ukraine in February 2022.
In response to the invasion, the United States banned oil imports from Russia, the world’s biggest exporter of oil, a move that helped push world energy costs up.
The American benchmark, West Texas Intermediate crude oil, soared to more than $120 per barrel in June 2022 and stayed above $90 through that summer. Inflation reached a 40-year high, as consumer prices rose 9.1 percent in June 2022 from a year earlier.
Prices fell late last year as investors expected a recession and Chinese demand for oil fell, with the market reacting to fears of more Covid-19 lockdowns in the country.
At about $80 per barrel now, oil prices are lower than they were at the start of the war.
Those easing prices are reflected in U.S. inflation data. The overall Consumer Price Index, which includes food and energy costs, climbed 3 percent over the year through June, but a measure that strips out food and energy rose more, by nearly 5 percent.