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ExxonMobil profit declines in Q1 as natural gas prices fall

The Spring, Texas-based company's revenue totaled $83.08 billion, down from $86.56 billion a year earlier. Photo via exxonmobil.com

ExxonMobil's profit declined in its first quarter as natural gas prices fell and industry refining margins dropped.

The energy company earned $8.22 billion, or $2.06 per share, for the three months ended March 31. A year earlier it earned $11.43 billion, or $2.79 per share.

The results didn't meet Wall Street expectations, but Exxon does not adjust its reported results based on one-time events such as assets sales. Analysts polled by Zacks Investment Research were expecting earnings of $2.19 per share.

Shares declined slightly before the market open on Friday.

The Spring, Texas-based company's revenue totaled $83.08 billion, down from $86.56 billion a year earlier. Wall Street forecast revenue of $86.6 billion.

Production in Guyana reached more than 600,000 oil-equivalent barrels per day, a higher-than-expected level, the company said.

Exxon went on a bit of a shopping spree last year when oil prices were surging.

In July, the company said it would pay $4.9 billion for Denbury Resources, an oil and gas producer that has entered the business of capturing and storing carbon and stands to benefit from changes in U.S. climate policy.

In October Exxon topped that deal by announcing that it would buy shale operator Pioneer Natural Resources for $60 billion. Two months later, the Federal Trade Commission, which enforces federal antitrust law, asked for additional information from the companies about the proposed deal. The request is a step the agency takes when reviewing whether a merger could be anticompetitive under U.S. law. Pioneer disclosed the request in a filing in January.

Elevated levels of cash for all big producers drove a massive consolidation in the energy sector. In October Chevron said it would buy Hess Corp. for $53 billion.

Oil markets are being stretched by cutbacks in oil production from Saudi Arabia and Russia, and the war between Israel and Hamas still potentially runs the risk of igniting a broader conflict in the Middle East. While attacks on Israel do not disrupt global oil supply, according to an analysis by the U.S Energy Information Administration, “they raise the potential for oil supply disruptions and higher oil prices.”

Elsewhere in the sector, Chevron Corp. reported a first-quarter profit of $5.5 billion, or $2.97 per share. Its adjusted profit was $2.93 per share.

The results surpassed Wall Street expectations, but Chevron also does not adjust its reported results based on one-time events such as asset sales. Analysts surveyed by Zacks predicted earnings of $2.84 per share.

The oil company posted revenue of $48.72 billion, which fell short of Wall Street's estimate of $49.94 billion.

Chevron's stock dipped in premarket trading.

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A View From HETI

SunPower is expanding its solar and VPP business in Texas. Photo via Unsplash

Utah-based solar technology and battery storage company SunPower has announced its expansion into Texas by acquiring “prime project assets” from Houston installer Green Light Solar.

As part of the deal, Green Light Solar CEO James Garrett will lead SunPower’s U.S. installation group. Garrett is based in the Houston area, according to LinkedIn.

Green Light Solar focuses on residential and commercial solar installations, battery backups and whole-home generators throughout Texas, Louisiana, Oklahoma and Colorado. As of press time, SunPower had not disclosed which specific projects or assets were included in the acquisition.

In addition to the Green Light acquisition, SunPower also announced its second strategic partnership with Fort Worth-based SOLRITE Energy, which provides solar and battery project financing and virtual power plant capabilities.

Through the partnership, SunPower plans to expand its residential solar and battery storage business and grow its virtual power plant (VPP) network in Texas.

A virtual power plant is a network of connected energy sources that can supply electricity to the grid when demand is high. The network draws on energy stored in individual residential and commercial battery systems. VPPs can also help participating homeowners generate additional revenue by selling their stored power.

“SOLRITE not only sources projects to us but also provides project funding for innovative systems with large batteries connected to a VPP, enabling power sales into the open market,” T. J. Rodgers, SunPower CEO, said in a news release. “That VPP capability provides an extra source of income that SOLRITE shares with homeowners and EPCs, making SOLRITE an attractive partner.”

SunPower will bring its sales, installation and lifetime warranty support to the partnership, while SOLRITE will provide its virtual power plant platform and solar financing capabilities, according to the release.

"Building our VPP business is a key part of SunPower’s growth strategy going forward,” Kapil Rai, EVP of Direct at SunPower, added in the release. “Our partnership with SOLRITE gives us a path to bring together customer acquisition, solar, storage deployment, and financing to develop this business in Texas and beyond.”

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