Oil and gas price drops expected to weigh on earnings
Exxon Mobil Corp. has signaled that its second-quarter earnings could fall by as much as $1.9 billion compared to Q1, citing weaker crude and natural gas prices. In a regulatory filing released Tuesday, the oil giant said declining energy prices are the primary drag on its performance for the period ending June 30.
For context, Exxon reported $7.71 billion in profit for the first quarter. Now, it anticipates that falling liquids prices — including crude, condensate, and natural gas liquids — will shave off $800 million to $1.2 billion. Lower natural gas prices are expected to cut profits by another $300 million to $700 million.
Market softness deepens across the energy sector
The downward pressure on prices comes as U.S. production remains high, driving oil and gas futures down by 10% and 8%, respectively, in 2025. The impact is not unique to Exxon. Just yesterday, Shell also warned that its Q2 gas trading and optimization results would come in well below Q1 levels.
Exxon also flagged additional headwinds from non-price factors. Changes in timing effects are projected to lower profit by $300 million or, in the best-case scenario, add $100 million. Meanwhile, planned maintenance could subtract as much as $200 million from earnings.
Investor sentiment resilient despite headwinds
Despite the warning, Exxon shares were up over 1% in early Tuesday trading and have climbed approximately 5% year-to-date. Investors may be viewing the dip in earnings as transitory, with longer-term demand fundamentals remaining intact.
The company is slated to release official second-quarter results on August 1. Analysts will be watching closely for updates on production volumes, cost controls, and any signs of strategic adjustments amid ongoing commodity price volatility.
