Exxon Mobil returned to profitability in the first quarter, beating estimates for the period as the company recovered from the devastation in the energy sector caused by the coronavirus pandemic.
The oil giant earned $ 2.7 billion during the reporting period. The company had net earnings per share of 65 cents on sales of $ 59.15 billion. Wall Street analysts surveyed by Refinitiv expected the company to make 59 cents per share on sales of $ 54.6 billion.
In the first quarter of last year, the company lost $ 610 million as the effects of the coronavirus began to weigh in. The company posted a loss of $ 20.1 billion for the fourth quarter in a row.
Exxon’s shares were unchanged during premarket trading on Friday.
“The strong first quarter results reflect the benefits of higher raw material prices and our focus on structural cost reduction while investing in assets with low delivery costs is a priority,” said chairman and CEO Darren Woods in a statement.
“Cash flow from operating activities fully covered dividend and capital investments during the quarter.”
Exxon’s oil equivalent production increased 3% from the previous quarter to 3.8 million barrels per day. The company said the winter storm that struck the south cost the company $ 600 million in all of its businesses.
Energy is the top performing S&P 500 sector this year, and Exxon shares are up 43% through 2021, by Thursday’s close on Thursday.
To counteract the lower oil prices last year, the company has taken aggressive cost-cutting measures. During the downturn, Exxon stuck to its dividend, which stands at 5.9%.
Chevron also said it returned to profitability in the first quarter on Friday.
The board fight is heating up
Exxon has been pressured by shareholders to reorganize its board of directors. As a result, the company added three new board members, including activist investor and ESG advocate Jeffrey Ubben.
Ubben recently told CNBC that he believes Exxon is an integral part of a low-carbon future. “When you think about the role of Exxon, you have to do the hard things, and you can’t go to zero without doing the hard things. Using existing infrastructure and capturing the carbon is probably the cheapest and fastest way to go to get to zero. ” he said.
Some, including the activist firm Engine No. 1, however, believe Exxon hasn’t gone far enough to secure its place in a low-carbon world. The group has been targeting the oil giant since December and has proposed its own list of four new directors.
Earlier this week, the company announced it had received support from major retirement funds, including CalPERS, CalSTRS, and the New York State Pension Fund. Engine # 1 cites, among other things, failure to position ExxonMobil for long-term value creation, lack of discipline in allocating capital, and misaligned incentives.
DE Shaw also had his sights set on the energy company at one point, but Exxons Woods said talks with the company had been productive.
“I think they are pretty much in tune with the discussions we have had and the direction we are headed and today I am not aware of any real air between us or a gap in the way we are we should move forward and what they think we should do, “he said Friday on CNBC’s” Squawk Box “.
The conversations with engine # 1 were less productive. Woods said the company was “not particularly keen to get involved and understand” how Exxon can add shareholder value as it moves into a low-carbon future.
“Honestly, they are pushing us to wind down our investments, do the business, move to solar and wind where we have no real competitive advantage,” said Woods.
The Board of Directors will vote at the company’s 2021 Annual General Meeting on May 26th.
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