(Bloomberg) -- Exxon Mobil Corp. expects refining profits to drop due to lower margins across the industry, reducing earnings estimates for the second quarter.
The company’s earnings from refining will decline between $1.1 billion and $1.5 billion in the second quarter compared with the previous three months, the Spring, Texas-based company said in a statement Monday. The division made a profit of $1.4 billion in the first quarter.
The refining hit means implied earnings per share overall “look light versus market expectations,” RBC Capital Markets analyst Biraj Borkhataria wrote in a note. Exxon’s statement implies net income of about $8.3 billion, though the company often tends to beat its guidance, he said.
Analysts had been expecting net income of about $10 billion, according to the Bloomberg consensus. The shares dropped 1.2% in pre-market trading.
Exxon’s gain of as much as $700 million from oil prices will likely be fully offset from a loss from gas prices, the company said.
Exxon is the first supermajor to release earnings guidance for the second quarter and is often seen as a proxy for the sector.
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