A cleaner operates a Chevron oil drilling rig near Taft, California.
Chip Chipman | Bloomberg | Getty Images
Exxon and Chevron posted record profits during the second quarter of 2022 as higher commodity prices boosted their operations, and as the oil giants kept their spending in check.
Chevron reported earnings of $11.62 billion during the three-month period, up from $3.08 billion during the second quarter of 2021.
Meanwhile, Exxon reported profits of $17.9 billion during the second quarter of 2022, compared to $4.7 billion during the second quarter of 2021.
Shares of both companies are up nearly 3% during pre-market trading on Friday.
Chevron’s results beat analyst estimates on both the bottom line and bottom line. Chevron reported earnings of $5.82 per share excluding items of $68.76 billion in revenue during the second quarter. Analysts had expected the company to earn $5.10 per share on $59.29 billion in revenue, according to estimates compiled by Refinitiv.
Exxon beat estimates, earning $4.14 per share excluding items versus $3.74 per share expected, according to Refinitiv estimates. But the company’s revenue, at $115.68 billion, did not exceed the $132.7 billion that analysts had been expecting.
The earnings come as energy stocks have faltered in recent months. Recession fears – and what that means for demand for oil and petroleum products – weighed on the group. The energy sector hit multi-year highs in June, but has fallen 18% since then.
However, energy stocks remain by far the best performing group this year, up 35%. The utilities sector comes in second with a gain of just 2.4%.
The rise in energy stocks comes on the heels of higher oil and gas prices, which have jumped as Europe looks to move away from Russian fuel.
The record corporate quarter is likely to provoke more anger from Washington. President Joe Biden has called on companies to increase production, saying they are keeping prices high at the expense of consumers. Rising energy costs have been a major factor in high inflation for decades.
For their part, oil and gas companies say they are raising production. They also note that they deal with the same macro issues – such as employment – that play throughout the economy.
“We more than doubled the investment from last year to grow our conventional and new energy lines of business,” Mike Wirth, Chevron Chairman and CEO, said in a statement.
The company’s production in the Permian Basin is up 15% year over year. For its U.S. operations, the average selling price per barrel of oil was $89 during the second quarter, up from $54 during the same period last year.
The average selling price of natural gas jumped to $6.22 per thousand cubic feet, up from $2.16 during the second quarter of 2022.
The oil giant also increased guidance for its buyback program, raising the maximum range to $15 billion.
“Earnings and cash flow have benefited from increased production, increased realization, and tighter cost control,” Darren Woods, Exxon Chairman and CEO, said in a statement.
“The strong second-quarter results reflect our focus on fundamentals and investments that we started several years ago and have continued into the depths of the pandemic,” he added.
Exxon said its oil equivalent production reached 3.7 million barrels per day in the second quarter, up 4% from the first quarter.
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