A floorman operates a Chevron oil rig near Taft, California.
Chipman chip | Bloomberg | Getty Images
Exxon and Chevron posted record profits in the second quarter of 2022 as high commodity prices boost operations and oil giants rein in spending.
Chevron reported earnings of $11.62 billion in the three-month period, compared to $3.08 billion in the second quarter of 2021.
Exxon, meanwhile, posted a profit of $17.9 billion in the second quarter of 2022, compared to $4.7 billion in the second quarter of 2021.
Shares of both companies rose about 3% in premarket trading on Friday.
Chevron’s results beat analysts’ estimates in both revenue and earnings. Chevron earned $5.82 per share excluding items on revenue of $68.76 billion in the second quarter. Analysts had expected the company to earn $5.10 a 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, fell short of the $132.7 billion expected by analysts.
The gains come as energy stocks have faltered in recent months. Recession fears – and what that means for demand for oil and petroleum products – have weighed on the group. The energy sector hit a multi-year high in June, but has since fallen 18%.
Yet energy stocks are by far the best performing group this year, rising 35%. The next best sector is utilities, which only gained 2.4%.
The rise in energy stocks follows a surge in oil and gas prices, which have surged as Europe seeks to move away from Russian fuel.
The record business quarter is likely to draw further ire from Washington. President Joe Biden has called on companies to increase production, saying they are keeping prices high at the expense of consumers. Soaring energy costs have been a key driver of high inflation for decades.
For their part, oil and gas companies say they are increasing their production. They also note that they face the same macroeconomic issues – such as labor – that are playing out across the economy.
“We have more than doubled our investments from last year to expand both traditional and new energy businesses,” Chevron Chairman and CEO Mike Wirth said in a statement.
The company’s production in the Permian Basin increased 15% year over year. For its operations in the United States, the average selling price per barrel of oil was $89 during the second quarter, up from $54 during the same period last year.
Average natural gas selling prices jumped to $6.22 per thousand cubic feet from $2.16 in the second quarter of 2022.
The oil giant also raised its forecast for its buyback program, bringing the high end to $15 billion.
“Earnings and cash flow benefited from increased production, higher realizations and tight cost control,” Exxon Chairman and Chief Executive Darren Woods said in a statement.
“The strong second quarter results reflect our focus on fundamentals and the investments we put in place years ago and sustained in the depths of the pandemic,” he added.
Exxon said its oil-equivalent production was 3.7 million barrels per day in the second quarter, up 4% from the first quarter.