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Oil giant ExxonMobil reported worse than expected fourth quarter earnings but higher revenue Friday before the market as  revenue missed in the chenical and downstream segments on lower margins and oil prices. $XOM traded lower on the report and Coronavirus concerns.

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ExxonMobil Inc. (NYSE: $XOM) Reported Earnings Before Open Friday

$0.41 Missed $0.43 EPS But $67.17B Beat $64.16 billion revenue forecast

Earnings

Exxon Mobil Corp. (NYSE: XOM) reported Q4 earnings on Friday that missed analyst expectations The company’s quarter was boosted by one-time events, including a $3.7 billion gain from Exxon’s Norway divestment.

Excluding these items, profit for the quarter missed analyst estimates by 2 cents per share. Adjusted earnings were 41 cents per share vs. 43 cents per share expected by Refinitiv. Revenue was $67.17 billion, versus $64.166 billion expected by Refinitiv

 

Exxon Mobil Corporation NYSE: $XOM

Market Reaction Pre-market 63.19 −1.60 (-2.47%)

  • Upstream income: $2.19 billion vs. $2.44 billion expected by FactSet
  • Downstream income: $898 million vs. $457.2 million expected by FactSet
  • Chemicals income: $355 million loss vs. $174.6 million loss expected by FactSet

Highlights

“Our operations performed well, while short-term supply length in the downstream and chemicals businesses impacted margins and financial results,” Darren Woods, chairman and chief executive officer, said. “Growth in demand for the products that underpin our businesses remains strong. We remain focused on improving our base businesses, driving efficiencies, and optimizing the value of our investment portfolio.”

  • Oil-equivalent production was 4 million barrels per day, which was in-line with the same quarter a year earlier. A 4% increase in liquids offset by a 5% decrease in gas.
  • Production in the Permian spiked 54% year-over-year, and during the fourth quarter production began in the company’s offshore Guyana operations.
  • Excluding entitlement effects and divestments, liquids production increased 2% driven by Permian Basin growth, while natural gas volumes decreased 4%.
  • The company said that capital and exploration expenditures grew 8% year-over-year to $8.46 billion.
  • Downstream operations margins were “significantly lower” than in the prior quarter, while margins in the chemicals business “weakened further during the quarter from already depressed levels.”
  • The company completed the sale of its upstream assets in Norway to Var Energi AS, which added $3.7 billion to earnings, and is part of the company’s plan to divest around $15 billion worth of non-strategic assets by 2021.

ExxonMobil Q4 2019 Earnings

In upstream, average crude and natural gas realizations were essentially in line with last quarter. Liquid volumes rose 2% on growth and lower scheduled maintenance. Natural gas volumes increased 5% driven by seasonal demand. Permian unconventional development continued with production up 54% from last year.

In downstream, industry fuel margins were significantly lower than third-quarter, reflecting seasonally lower demand and increased supply from reduced industry maintenance. In chemical, margins weakened further from already depressed levels with supply length from recent industry capacity additions and higher feed costs.

ExxonMobil Huge Liza Field Acerage in Guyana

ExxonMobil said that oil production started from the Liza field offshore Guyana, less than five years after the first discovery of hydrocarbons, well ahead of the industry average. Gross production from the Liza phase 1 development, located in the Stabroek block, is expected to reach a capacity of 120,000 gross barrels of oil per day in the coming months.

$XOM made a final investment decision during 2Q17 to proceed with the Liza field development located offshore Guyana, where production is expected to start in 2020. The company expects Liza to add up to 120,000 barrels of oil per day to $XOM's production.

Liza HESS EXXON

 

Source: ExxonMobil, Alpha Street

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