Exxon and Chevron report sluggish profits

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Exxon Mobil and Chevron saw significant declines in refined product margins.
Consumers have benefited as fuel prices, which usually rise in the summer, have fallen this year.
As a result, revenues for both oil and gas conglomerates fell in the third quarter from the same period a year ago.

Oil and gas giants Exxon Mobil (XOM) and Chevron (CVX) beat modest third-quarter earnings expectations on Friday. But substantially weaker profit margins for refined products, reflecting lower summer fuel prices, lowered overall net income for both companies from a year ago.

Exxon reported net income of $8.6 billion, or $1.92 per share. That beat the consensus projection tracked by Visible Alpha. But profits fell 5 percent from the same period a year ago and 7 percent from the second quarter of this year. Exxon’s annual profits have fallen in five of the past six quarters.

Chevron took a steeper hit to earnings than a year ago. The company reported net income of $4.5 billion, or $2.48 per share. Profits fell 31% from the same period last year, although they were up marginally from this year’s second quarter.

Shares of Chevron were 3 percent higher in afternoon trade, while Exxon was down nearly 1 percent.

Fuel price impact

Exxon said its “significantly weaker industry-leading refining margins” fell from historically high levels as “supply from industry capacity additions outstripped record global demand.”

Indeed, average US prices for all gasoline fell to $3.48 per gallon during the quarter, down 10% from $3.87 in last year’s third quarter. Average diesel prices fell to $3.69 per gallon from $4.48, down 18%.

U.S. gas prices peaked late this winter and early this spring, a seasonal anomaly that helped consumers and the Federal Reserve in its fight against inflation. But for energy producers, falling oil, natural gas and fuel prices have eroded the historically strong profits they enjoyed in late 2022 and much of 2023.