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ExxonMobil (MTDR) Q2 Earnings Miss on Upstream Weakness
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Exxon Mobil Corporation's (XOM - Free Report) second-quarter 2023 earnings per share of $1.94, excluding identified items, missed the Zacks Consensus Estimate of $2.00 and slipped from the year-ago profit of $4.14.
Total quarterly revenues of $82,914 million beat the Zacks Consensus Estimate of $78,845 million but declined from the year-ago quarter’s $115,681 million.
The weak earnings resulted from lower realizations of crude prices, offset partially by encouraging finished lubes and basestock margins.
Exxon Mobil Corporation Price, Consensus and EPS Surprise
The segment reported quarterly earnings (excluding identified items) of $4,589 million, declining from $11,072 million in the year-ago quarter and missing our estimate of $5,207.1 million. Lower crude prices primarily led to the fall.
Operations in the United States recorded a profit of $920 million, which decreased from $3,450 million in the June quarter of 2022. The company reported a profit of $3,669 million from non-U.S. operations, deteriorating from $7,622 million in the year-ago quarter but beating our estimate of $3,660.5 million.
Production: ExxonMobil’s total production averaged 3,608 thousand barrels of oil equivalent per day (MBoe/d), lower than 3,732 MBoe/d a year ago and our estimate of 3,720.8 MBoe/d.
Liquid production increased to 2,353 thousand barrels per day (MBbls/d) from 2,298 MBbls/d in the prior-year quarter. The outperformance was owing to higher production, primarily in the United States, Asia and Canada. Yet, natural gas production was 7,529 million cubic feet per day (Mmcf/d), down from 8,606 Mmcf/d a year ago, primarily due to lower output from the United States and Canada.
Price Realization: In the United States, ExxonMobil recorded crude price realization of $71.36 per barrel, significantly lower than the year-ago quarter’s $107.78 and missed our estimate of $73.20. The same metric for non-U.S. operations declined to $70.08 per barrel from $103.15 but beat our estimate of $67.22.
Natural gas prices in the United States were $1.45 per thousand cubic feet (Mcf), lower than the year-ago quarter’s $6.49. Also, in the non-U.S. section, the metric declined to $11.44 per Mcf from $19.68.
Energy Products
The segment recorded a profit (excluding identified items) of $2,292 million, declining from $5,273 million a year ago and missed our estimate of $3,334.2 million, primarily due to soft diesel margins.
Chemical Products
This unit of ExxonMobil recorded an $828 million profit (excluding identified items), down from $1,076 million in the year-ago quarter, but beat our estimate of $800.9 million. Lower feed costs aided the business unit, offset partially by weaker industry margins.
Specialty Products
This unit of ExxonMobil recorded a $671 million profit (excluding identified items), up from earnings of $417 million in the year-ago quarter and beat our projection of $660.3 million, primarily due to encouraging finished lubes and basestock margins.
Financials
In the quarter under review, ExxonMobil generated a cash flow of $10,670 million from operations and asset divestments. The company’s capital and exploration spending was $6,166 million.
At the end of second-quarter 2023, ExxonMobil’s total cash and cash equivalents were $29,528 million, and long-term debt amounted to $37,567 million.
Guidance
For this year, XOM expects to meet its guidance for capital and exploration expenditures of $23 billion to $25 billion.
Zacks Rank & Stocks to Consider
ExxonMobil currently carries a Zacks Rank #3 (Hold). Better-ranked players in the energy space include Evolution Petroleum Corporation (EPM - Free Report) , Oceaneering International, Inc. (OII - Free Report) and MPLX LP (MPLX - Free Report) . While Evolution and Oceaneering sport a Zacks Rank #1 (Strong Buy), MPLX carries a Zacks Rank #2 (Buy).
Through its ownership interests in onshore oil and natural gas properties in the United States, Evolution Petroleum is touted as a key independent energy player.
Oceaneering International is well placed on improving oil prices since it is a leading provider of engineered services and products and robotic solutions to the energy companies working offshore. Higher oil price is supporting increased upstream activities, which, in turn, will improve demand for Oceaneering’s drilling and completions support services.
MPLX has ownership and operating interests in midstream energy infrastructure and logistics assets, thereby generating stable cashflow.
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ExxonMobil (MTDR) Q2 Earnings Miss on Upstream Weakness
Exxon Mobil Corporation's (XOM - Free Report) second-quarter 2023 earnings per share of $1.94, excluding identified items, missed the Zacks Consensus Estimate of $2.00 and slipped from the year-ago profit of $4.14.
Total quarterly revenues of $82,914 million beat the Zacks Consensus Estimate of $78,845 million but declined from the year-ago quarter’s $115,681 million.
The weak earnings resulted from lower realizations of crude prices, offset partially by encouraging finished lubes and basestock margins.
Exxon Mobil Corporation Price, Consensus and EPS Surprise
Exxon Mobil Corporation price-consensus-eps-surprise-chart | Exxon Mobil Corporation Quote
Operational Performance
Upstream
The segment reported quarterly earnings (excluding identified items) of $4,589 million, declining from $11,072 million in the year-ago quarter and missing our estimate of $5,207.1 million. Lower crude prices primarily led to the fall.
Operations in the United States recorded a profit of $920 million, which decreased from $3,450 million in the June quarter of 2022. The company reported a profit of $3,669 million from non-U.S. operations, deteriorating from $7,622 million in the year-ago quarter but beating our estimate of $3,660.5 million.
Production: ExxonMobil’s total production averaged 3,608 thousand barrels of oil equivalent per day (MBoe/d), lower than 3,732 MBoe/d a year ago and our estimate of 3,720.8 MBoe/d.
Liquid production increased to 2,353 thousand barrels per day (MBbls/d) from 2,298 MBbls/d in the prior-year quarter. The outperformance was owing to higher production, primarily in the United States, Asia and Canada. Yet, natural gas production was 7,529 million cubic feet per day (Mmcf/d), down from 8,606 Mmcf/d a year ago, primarily due to lower output from the United States and Canada.
Price Realization: In the United States, ExxonMobil recorded crude price realization of $71.36 per barrel, significantly lower than the year-ago quarter’s $107.78 and missed our estimate of $73.20. The same metric for non-U.S. operations declined to $70.08 per barrel from $103.15 but beat our estimate of $67.22.
Natural gas prices in the United States were $1.45 per thousand cubic feet (Mcf), lower than the year-ago quarter’s $6.49. Also, in the non-U.S. section, the metric declined to $11.44 per Mcf from $19.68.
Energy Products
The segment recorded a profit (excluding identified items) of $2,292 million, declining from $5,273 million a year ago and missed our estimate of $3,334.2 million, primarily due to soft diesel margins.
Chemical Products
This unit of ExxonMobil recorded an $828 million profit (excluding identified items), down from $1,076 million in the year-ago quarter, but beat our estimate of $800.9 million. Lower feed costs aided the business unit, offset partially by weaker industry margins.
Specialty Products
This unit of ExxonMobil recorded a $671 million profit (excluding identified items), up from earnings of $417 million in the year-ago quarter and beat our projection of $660.3 million, primarily due to encouraging finished lubes and basestock margins.
Financials
In the quarter under review, ExxonMobil generated a cash flow of $10,670 million from operations and asset divestments. The company’s capital and exploration spending was $6,166 million.
At the end of second-quarter 2023, ExxonMobil’s total cash and cash equivalents were $29,528 million, and long-term debt amounted to $37,567 million.
Guidance
For this year, XOM expects to meet its guidance for capital and exploration expenditures of $23 billion to $25 billion.
Zacks Rank & Stocks to Consider
ExxonMobil currently carries a Zacks Rank #3 (Hold). Better-ranked players in the energy space include Evolution Petroleum Corporation (EPM - Free Report) , Oceaneering International, Inc. (OII - Free Report) and MPLX LP (MPLX - Free Report) . While Evolution and Oceaneering sport a Zacks Rank #1 (Strong Buy), MPLX carries a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Through its ownership interests in onshore oil and natural gas properties in the United States, Evolution Petroleum is touted as a key independent energy player.
Oceaneering International is well placed on improving oil prices since it is a leading provider of engineered services and products and robotic solutions to the energy companies working offshore. Higher oil price is supporting increased upstream activities, which, in turn, will improve demand for Oceaneering’s drilling and completions support services.
MPLX has ownership and operating interests in midstream energy infrastructure and logistics assets, thereby generating stable cashflow.