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What’s happening: Shares of ExxonMobil Corporation fell on Friday, after the company released results for its first quarter.
What happened: The energy giant reported weaker-than-expected earnings for its latest quarter on Friday.
ExxonMobil, along with other oil and gas companies, has been hit by changing weather conditions.
How were the results: The Spring, Texas-based company reported a decline of 28% year-over-year in profits for the first quarter.
Why it matters: The latest quarterly results from oil and gas majors have signalled a sharp decline in natural gas prices as a warmer winter in the Northern Hemisphere weighed on overall demand.
Exxon said global oil prices were almost flat year-over-year, while the natural gas price received by the company was 32% lower than the year-earlier quarter.
Exxon’s quarterly earnings contracted to $8.22 billion in the first quarter, from $11.43 billion in the year-ago period, amid a decline in industry refining margins and natural gas prices.
Earnings from oil and gas production declined 14%, while refining dropped 67% in the quarter. However, the company’s chemicals business bucked the trend, with its earnings more than doubling amid a decline in input costs and margin expansions.
Exxon declared a dividend of 95 cents per share for the second quarter, payable on June 10 to shareholders of record as of May 15.
“Looking ahead, we’re making great progress on our plans to grow the earnings power of our existing businesses from investments in advantaged assets and higher-value products, and further reduce structural costs,” CEO Darren Woods said during the earnings call.
How shares responded: ExxonMobil’s shares fell 2.8% to close at $117.96 on Friday, following the release of quarterly results. The stock has gained around 12% over the past six months.
What to watch: Investors will continue monitoring the company’s acquisition of Pioneer Natural Resources, which is projected to wrap up in the weeks ahead and make Exxon one of the top producers in the Permian basin. Exxon expects the all-stock deal with Pioneer to double its output to over 1.3 million barrels of oil equivalent per day.
Context: The EUR/USD forex pair moved lower on Friday, as investors assessed the latest economic data.
Details: Data released on Friday showed Eurozone’s bank lending to households rising by 0.2% year-over-year to €6.875 trillion in March, compared to a 0.3% increase a month ago. Additionally, lending to companies grew by 0.4% to €5.132 trillion, after a 0.3% gain in the previous month. Overall private sector credit growth accelerated to 0.8% in March, from 0.7% in the previous month.
Germany’s GfK Consumer Climate Indicator improved to -24.2 heading into May, from -27.3 in the prior month. The figure also topped market estimates of -25.9 and was also the highest in two years.
Strength in the US dollar exerted pressure on the EUR/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained 0.47% to 106.09 on Friday.
The EUR/USD fell 0.35% to 1.0693 on Friday, after hitting two-week highs earlier in the session. The STOXX Europe 600 Index jumped 1.11% to settle at 507.98.
What to watch: Investors await the release of economic data on economic sentiment indicator, consumer confidence and services confidence indicator from the Eurozone today. The economic sentiment indicator in the Eurozone had risen to a three-month high of 96.3 in March and is expected to increase further to 96.9 in April.
Analysts expect consumer confidence in the Eurozone to remain almost stable at -14.7 in April, while the services confidence indicator is projected to increase to 6.5, from 6.3 in March.
Other Markets: US trading indices closed higher on Friday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.40%, 1.02% and 1.65%, respectively.
Russia’s military forces have been making daily tactical gains along the eastern front in Ukraine. The news sent the safe-haven US dollar index higher in forex trading this morning.
Vietnam’s trade surplus on goods shrank to $0.68 billion in April, from $2.66 billion in the year-ago month, exerting pressure on the VND/USD forex pair.
Taiwan’s consumer confidence index dipped to 63.37 in April, from a 14-month high of 73.51 in the prior month, which sent the TWD/USD pair lower in forex trading this morning.
China’s industrial profits widened by 4.3% year-over-year to 1,505.5305 billion yuan during the first three months of the year, easing from the 10.2% surge recorded in the previous period, which exerted pressure on the CNY/USD forex pair.
US personal income increased by 0.5% in March, accelerating from the 0.3% gain recorded a month ago, which sent the Nasdaq 100 index higher by around 1.65% on Friday.
Indonesia’s foreign direct investment, Spain’s inflation rate, Turkey’s economic confidence index, Eurozone’s consumer confidence price trends, industry confidence indicator and selling price expectations, Germany’s consumer prices, US Dallas Fed manufacturing index, as well as Central Bank of Brazil’s focus market readout.
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