Saudi Aramco stock unbothered despite a hit to profit in Q1

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on May 9, 2023
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  • Aramco reports a 19% year-on-year decline in its first-quarter earnings.
  • The energy giant revealed plans of launching a new dividend today.
  • Saudi Aramco stock is up roughly 4.0% for the year at writing.

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Saudi Arabian Oil Co (SAU: 2222) is trading up today even after reporting a hit to its profit in the first quarter.

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Why is Saudi Aramco stock up today?

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What’s more important to investors, it seems, is that the world’s largest oil and gas company, nonetheless, reported net income that topped expectations.

Saudi Aramco earned $31.9 billion in its recently concluded quarter – down 19% from a year ago on lower oil prices but handily ahead of $30.5 billion that experts had forecast. In the earnings press release, CEO Amin Nasser said:

We are leveraging cutting-edge technologies to increase liquids-to-chemicals capacity and meet anticipated demand for petrochemical products.

The energy giant also confirmed that its profit was up 3.75% sequentially in Q1. Year-to-date, Saudi Aramco stock is up 4.0% at writing.

Saudi Aramco to launch a new dividend

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Saudi Aramco reported $30.9 billion in free cash flow for its first quarter – up slightly versus last year. CEO Nasser also said today:

We believe oil and gas will remain critical components of the global energy mix for the foreseeable future.

Last month, Fitch raised its long-term rating on this oil giant to “A+”. Saudi Aramco stock is up on Tuesday also because the company revealed plans of launching a performance-based quarterly dividend.

The stock market news arrives shortly after the oil and gas behemoth cited higher oil prices and reported a record $161 billion in net income for 2022 – a whopping 46.5% annualised growth.

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