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Oil Stock Earnings Reports: Chevron (CVX) VS. Exxon Mobil (XOM)

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This last week has been a busy one in regards to earnings, with over 1,000 public companies releasing their financial results from their most recent quarter. Friday saw a smaller amount of earnings reports, though there were still a multitude of companies that released financial results before the bell.

Two companies on the list of those that reported come from the oil producing industry, which has seen its fair share of struggles as of late on low world oil prices. Below are the two oil producers who reported their latest quarter’s financial results, which were considered to be mixed by most.

Chevron Corporation (CVX - Free Report)

San Ramon, California-based Chevron Corporation (CVX - Free Report) reported its second quarter 2016 financial results before the bell, posting adjusted EPS that was above estimates, though revenue was lower than expected. CVX posted EPS of $0.49 (excluding special items), much higher than the Zacks Consensus Estimate of $0.31. Revenues came in at $29.3 billion for the second quarter, lower than the Zacks Consensus Estimate of $29.8 billion.

Including impairments and charges for the quarter, Chevron actually posted a loss of $1.5 billion, or EPS of -$0.78. The company recorded impairments and other charges of $2.8 billion, on assets in its upstream exploration and production business that were expected to produce revenues insufficient to cover costs, Chairman and CEO John Watson said in a statement.

Watson also added, “The second quarter results reflected lower oil prices and our ongoing adjustment to a lower oil price world.” Losses in the company’s US and international upstream operation widened from the year-earlier period.

Chevron also left its quarterly dividend unchanged at $1.07 ahead of earnings on Wednesday. The company has not raised its dividend since the second quarter of 2014. In the first half of 2016, cash flow from operations has fallen more than 60% year-over-year to $3.7 billion.

CVX was trading around 1% lower to just over $100 a share early Friday morning. Chevron is currently a Zacks Rank #2 (Buy).  

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Exxon Mobil Corporation (XOM - Free Report)

The other oil producer to reports its latest quarter’s financial results was Irving, Texas-based Exxon Mobil Corporation (XOM - Free Report) , which posted lower than expected earnings and revenues. XOM reported EPS of $0.41 (excluding special items), much lower than the Zacks Consensus Estimate of $0.64. Revenues came in at $57.694 billion, lower than the Zacks Consensus Estimate of $59.834.

Exxon Mobil’s profits were the smallest they have been since 1999, and were down 59% lower than for the same quarter last year. The EPS the company posted was $1 lower than it was in Q2 last year. Posted revenues were 22% lower than Q2 last year. Oil production remained flat compared to last year, at 4.1 billion barrels a day, partly because of recent Canadian wildfires.

“While our financial results reflect a volatile industry environment, Exxon Mobil remains focused on business fundamentals, cost discipline and advancing selective new investments across the value chain to extend our competitive advantage,” said Rex Tillerson, Exxon Mobil Chairman and CEO said in a prepared statement.  

Exxon Mobil announced last week it had acquired InternOil, a Papa New Guinea-company, for $2.5 billion. This gives Exxon Mobil-the largest publicly traded oil company- the Elk-Antelope oil field, one of the largest in Asia.

XOM was trading more than 2% lower Friday at just over $88 per share. The company is currently a Zacks Rank #2 (Buy).

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Bottom Line

The oil industry has seen its fair share of troubles as of late, and the companies in the industry continue to be affected by the world’s low oil price environment. Oil prices have come up since their lowest levels a short time ago, but prices will likely remain low as the world’s oil supply is set to remain high in the coming months. With the low oil price environment set to continue, companies like CVX and XOM will need to continue to adjust in order to succeed.

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