Exxon loses $610 million in the first quarter on write-downs tied to plunging oil

Exxon Mobil on Friday reported its first loss in decades as oil prices plunged to historic lows following a drop-off in demand caused by the coronavirus.

The oil giant lost $610 million in the first quarter due to $2.9 billion in write-downs tied to falling oil prices. Exxon posted a GAAP loss of 14 cents per share, and a non-GAAP profit of 53 cents per share. Revenue fell to $56.16 billion. In the same quarter a year earlier the company earned $2.35 billion, or 55 cents per share, on revenue of $63.63 billion.

Shares of Exxon slipped slipped 7.2% on Friday.

“COVID-19 has significantly impacted near-term demand, resulting in oversupplied markets and unprecedented pressure on commodity prices and margins,” CEO Darren Woods said in a statement.

The company said that oil-equivalent production in the first quarter rose 2% year over year to 4 million barrels per day. Looking forward, however, Exxon plans to cut production by around 400,000 oil-equivalent barrels per day due to “economic shut-ins and market curtailments as [a] result of COVID-19.”

West Texas Intermediate, the U.S. oil benchmark, has dropped more than 70% this year, which has forced energy companies to slash spending and in some cases, cut their dividend.

But Exxon has said the company has no plans to cut its dividend, and on Wednesday, ahead of the earnings release, the company said it would maintain its dividend at 87 cents per share.

In April, Exxon slashed its capital spending plan for 2020 by 30% from $33 billion to around $23 billion, and said it would cut operating expenses by roughly 15%. The company said the largest share of the reduction would be in the Permian Basin, where it’s easier to adjust short-cycle investments.

“Our company remains strong and we will manage through the current market downturn as we have for decades,” said Woods. “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,” he added.

Shares of Exxon have lost 38% this year.

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