On Friday, Exxon Mobil reported a $610 million loss for the first quarter of the year. It marked the first loss the company has suffered in decades. The losses are likely due to historically low oil prices due to lower demand because of the coronavirus. Exxon had $2.9 billion in write-downs during the quarter as well.
Exxon CEO, Darren Woods, said: “COVID-19 has significantly impacted near-term demand, resulting in oversupplied markets and unprecedented pressure on commodity prices and margins.”
The company posted a 14 cents a share GAAP loss on top of 53 cents a share non-GAAP profit. Exxon revenue declined to $56.16 billion compared to its revenue on a quarter-to-quarter comparison a year earlier of $63.63 billion. On Friday, Exxon shares fell 7.2 percent.
Exxon plans to reduce production of its oil-equivalent barrels by about 400,000 barrels per day. The company cited “economic shut-ins and market curtailments” due to COVID-19 as the reason.
The United State’s oil benchmark, West Texas Intermediate, has experienced a 70 percent drop this year. As a result, many oil and energy companies have cut dividends and are slashing expenses.
Exxon has no plans to slash its dividends, however, and said it will maintain its 87 cents per share dividend.
In April though, the company reduced its capital spending budget for the year by 30 percent, with a reduction to $23 billion from its initial $33 billion. Exxon also said that it will slash operating expenses to around 15 percent. The company said the Permian Basin would be the focus of many of the reductions.
Woods commented, “Our company remains strong and we will manage through the current market downturn as we have for decades. Today’s circumstances are certainly unique, but our people have the experience, our business has the scale, and we have the financial strength to see us through and emerge stronger than ever.”
Overall, Exxon shares are down by 38 percent thus far this year.