Exxon drops to a decade-low in the stock market following the Q4 earnings report

on Feb 1, 2020
Updated: Mar 11, 2020
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  • Exxon drops to a decade-low in the stock market following the Q4 earnings report.
  • Exxon’s downstream divisions, chemicals segment, and lower oil prices weighed on quarterly profits.
  • Exxon beat analysts' estimate for quarterly revenue but misses on the earnings front.

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Exxon revealed its total fourth-quarter earnings at $5.69 billion in its earnings report on Friday. While the company had previously earned $6 billion, poor performance from Exxon’s downstream divisions, chemicals segment, and consistently lower global prices for oil weighed on the profits in the recent quarter.

One-time events such as Exxon’s Norway divestment contributed to off-setting the lower earnings. The divestment was valued at $3.7 billion. Excluding such items, however, quarterly profit posted lower than the analysts’ estimate of 2 cents per share.

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Exxon Misses Analysts’ Forecast For Earnings Per Share

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According to Refinitiv, analysts had expected the American multinational oil and gas corporation to record $64.166 billion in revenue in the fourth quarter. On the earnings front, their forecast was capped at 43 cents per share. While Friday’s report beat the expectations for revenue printing $67.17 billion in Q4, adjusted earnings remained weighed at a lower than expected 41 cents per share for Exxon.

In the previous quarter, Exxon had generated $65.05 billion in revenue and made 75 cents of earnings per share. In the same quarter last year, revenue was recorded even higher at $71.90 billion with $1.41 of earnings per share.

As per FactSet, Exxon’s upstream income registered $2.19 billion in the fourth quarter that came significantly lower than the experts’ forecast of $2.44 billion. Downstream income, on the other hand, was noted at $898 million while a significantly lower $457.2 million was anticipated for the company in the recent quarter. Lastly, income from the chemicals unit was also recorded better than the expectations (174.6 million) at $355 million.

Oil-Equivalent Production Remains Unchanged As Compared To 2018’s Q4

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At 4 million BPD (barrels per day), the oil-equivalent production remained unchanged as compared to the same quarter last year. Oil-rich Permian, on the other hand, surged 54% (year over year) in terms of production in the fourth quarter. The company also saw a start to its offshore Guyana operations in Q4. Exxon highlighted $8.46 billion in capital and exploration spending that marked an 8% year over year growth.

Exxon commented on its earnings report and stated that the downstream operations margins came out alarmingly below the expectation while further weakness has been observed in the chemicals business margins in the fourth quarter. Following the dovish statement, the stock lost 4.13% on Friday. At the time of writing, Exxon is exchanging hands at around $62 per share in the stock market that marks its lowest in a decade.

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