ExxonMobil, Chevron Q1 Profits Drop Despite Oil Surge

ExxonMobil and Chevron, the two largest oil companies in the United States, reported sharp declines in first-quarter profits on Friday despite a surge in global oil prices triggered by the war with Iran that began on February 28.

ExxonMobil posted net income of $4.2 billion for the quarter ended March 31, a 46 percent drop from $7.7 billion a year earlier. Chevron recorded $2.2 billion in net profit, down 37 percent from $3.5 billion in the prior year. Company executives attributed the declines primarily to losses on financial derivatives and hedging contracts. Oil prices spiked ahead of physical deliveries, causing mark-to-market losses on those trades before the oil could be sold. ExxonMobil cited nearly $4 billion in unfavorable timing effects from unsettled derivatives, while Chevron booked a related $2.9 billion charge, according to the companies' earnings releases.

Both results exceeded Wall Street expectations. ExxonMobil's revenue reached $85.1 billion, surpassing forecasts of $82.2 billion, with operating cash flow of $13 billion. Chevron's adjusted earnings per share came in at $1.41, well above the anticipated 95 cents, though revenue of $48.6 billion fell short of...