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ExxonMobil (XOM) Q2 Earnings Miss Estimates on Weak Oil Price

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Exxon Mobil Corporation (XOM - Free Report)  reported weak second-quarter results owing to lower oil-equivalent production, coronavirus-induced weak commodity prices and reduced industry refining margins in both U.S. and non-U.S. operations.

The integrated energy giant’s loss per share of 70 cents – excluding identified items – was wider than the Zacks Consensus Estimate of a loss of 63 cents. In the year-ago quarter, the company reported earnings of 73 cents per share. Notably, another energy major that reported wider-than-expected loss in the June quarter is Chevron Corporation (CVX - Free Report) .

Exxon Mobil Corporation Price, Consensus and EPS Surprise

 

Exxon Mobil Corporation Price, Consensus and EPS Surprise

Exxon Mobil Corporation price-consensus-eps-surprise-chart | Exxon Mobil Corporation Quote

ExxonMobil’s total revenues of $32,605 million missed the Zacks Consensus Estimate of $36,081 and deteriorated from the year-earlier figure of $69,091 million.

Operational Performance

Upstream

The segment reported quarterly loss of $1,651 million against a profit of $3,261 million a year ago. The downside was owing to lower oil-equivalent production volumes and commodity prices.

Operations in the United States recorded a loss of $1,197 million against a profit of $335 million in the June quarter of 2019. Moreover, the company reported loss of $454 million from non-U.S. operations against the year-ago quarter’s profit of $2,926 million.

Production: Total production averaged 3.638 million barrels of oil-equivalent per day (MMBoE/D), lower than 3.909 MMBoE/D a year ago, reflecting coronavirus-induced drop in fuel demand and curtailment in volumes as mandated by the government.

Liquid production decreased to 2.306 million barrels per day (MMBbls/D) from 2.389 MMBbls/D in the prior-year quarter. While production from the United States, Europe and Africa declined significantly, it increased in Canada and Asia. Moreover, natural gas production was 7.990 billion cubic feet per day (Bcf/d), down from 9.120 Bcf/d a year ago due to lower output from Europe and United States.

Price Realization: In the United States, the company recorded crude price realization of $21.79 per barrel, lower than the year-ago quarter’s $57.95. The same metric for non-U.S. operations declined to $20.91 per barrel from the year-ago $62.47. Moreover, natural gas prices in the United States were recorded at $1.57 per thousand cubic feet (Kcf), below the year-ago quarter’s $2.22. Similarly, in the non-U.S. section, the metric fell to $4.07 per Kcf from $5.84 in second-quarter 2019.

Downstream

The segment recorded an earnings of $976 million, up from the year-ago profit of $451 million, primarily owing to decline in expenses. This was offset partially by lower industry refining margins in both U.S. and non-U.S. operations.

Notably, ExxonMobil's refinery throughput averaged 3.5 MMBbls/D, lower than the year-earlier level of 3.9 MMBbls/D.

Chemical

This unit recorded $467-million profit, up from $188 million in the year-ago quarter on an increase in margin from U.S. operations.

Financials

During the quarter under review, ExxonMobil generated cash flow of $43 million from operations and asset divestments, substantially down from $5.9 billion a year ago. The company's capital and exploration spending declined 34% year over year to $5.3 billion.

At the end of second-quarter 2020, total cash and cash equivalents were $12.6 billion, and debt amounted to $69.5 billion.

Zacks Rank & Stocks to Consider

The company currently has a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space include NGL Energy Partners LP (NGL - Free Report) and Cimarex Energy Co (XEC - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NGL Energy Partners’ bottom line for second-quarter 2020 is expected to rise 92.7% year over year.

Cimarex Energy’ 2020 bottom-line estimates have moved up over the past 30 days.

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