In an SEC filing, the oil giant noted that sales of upstream assets would positively impact results by around $400 million, although total impairments are projected to cost about $600 million. The filing did not provide specific reasons for these impairments.
Exxon's financial performance is closely monitored as an indicator of how other major oil companies might perform when they release their results this month.
According to financial firm LSEG, Exxon is anticipated to report earnings of $1.76 per share for the fourth quarter, a decrease from $2.48 per share in the same quarter last year.
Biraj Borkhataria, an oil analyst at RBC Capital Markets, remarked that Exxon's earnings outlook suggests profits are "well below consensus." He highlighted the forecast as indicating "significant headwinds" in the refining sector.
The company indicated that oil refining margins could reduce earnings by between $300 million and $700 million compared to the third quarter. Additionally, timing effects are expected to further diminish earnings by an estimated $500 million to $900 million.
Global demand for gasoline and diesel has fallen short of expectations, compounded by the launch of new oil refineries in Asia and Africa, which has resulted in an oversupply in the market. In the U.S., fuel inventories increased during the quarter as refiners maintained high utilization rates amid weaker-than-anticipated demand.
Oil prices dropped approximately 6% in the quarter ending December 31 compared to the previous three months, and nearly 12% year-over-year, as concerns about global oil demand persisted.
This decline was somewhat mitigated by a rise in U.S. natural gas prices, which increased by about 30% from the prior quarter.
In the third quarter, the industry leader reported earnings of $8.6 billion, with an adjusted profit of $9.96 billion in the fourth quarter of the previous year.
ExxonMobil reported that diminished margins within its chemical division are projected to result in a $400 million earnings reduction compared to the third quarter. The final results will be published on January 31st.