Exxon Mobil (NYSE:XOM) could report a record-high quarterly profit in Q1 from oil and gas prices of up to $9.3 billion, the company said on Monday.
During the quarter that ended on March 31, Exxon's operating profits from its oil and gas business could rise by $1.9-$2.7 billion over the previous quarter of $6.6 billion, according to the snapshot showing the company's Q1 earnings.
The war in Ukraine drove oil prices by as much as 25% in the previous quarter to an average of $114 per barrel, the highest mark in seven years.
Exxon does not hedge nor lock-in oil sales, which ultimately leads to its results matching energy price changes.
The snapshot of Exxon's profit indicates that other energy companies could see similar profits from oil prices, which could ultimately urge U.S. and European Union lawmakers to impose windfall taxes on oil and gas companies.
Still, the final quarterly profit results could be affected by Exxon's decision to phase out of Russia after its invasion of Ukraine. The move could result in a seizure of Exxon's $4 billion in assets and a 1-2% production and revenue blow.
Depending on the terms of its exit from Sakhalin, the company may be required to impair its investment in the project, it said in a filing.
Exxon's operating profit from its refining business could rise up by $300 million, while the company's chemicals unit could see a $300 million decline from the previous quarter.
Analysts expected Exxon to report earnings per share of $2.12 in the first quarter, according to Refinitiv, which represents a more than 200% year-over-year growth.
Goldman Sachs analyst Neil Mehta said that the update suggests EPS will likely arrive in line with the estimate. Exxon is set to report official results on April 29, according to a securities filing.
"We revise our 1Q2022 EPS estimate from $2.31 to $2.21. We remain constructive on XOM heading into the quarter and view earnings as set to inflect further in 2Q-4Q as commodity prices continue to improve. We see 26% total return to XOM on our 12-month $101 price target," Mehta said in a client note.
Exxon stock is down 0.4% today.
By Senad Karaahmetovic