Exxon Earnings Beat While Chevron Tops, Resumes Buybacks

Exxon Mobil (XOM) and Chevron (CVX) reported better-than-expected earnings early Friday as crude oil prices surged more than 20% during the second quarter. Exxon stock fell while Chevron stock rose.




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Chevron also will resume buybacks after suspending them in March 2020 when the pandemic sent oil prices crashing. Rival oil major Royal Dutch Shell (RDSA) beat estimates Thursday while also raising its dividend for the second consecutive quarter and approving a $2 billion buy back. Exxon continues to keep its payout steady at 87 cents. Chevron maintained its dividend at $1.34 after raising it 4% last quarter.

Exxon Earnings

Estimates: Analysts polled by FactSet see Exxon swinging to profit of $1.01 per share from a year-earlier loss of 70 cents. Revenue is seen surging 98% to $64.64 billion.

Results: EPS of $1.10 on revenue of $67.74 billion. Oil-equivalent production fell % to 3.6 million barrels per day. Production in the Permian Basin jumped 34% to 400,000 oil-equivalent bpd.

Upstream operations had income of $3.2 billion vs. a loss of $1.65 billion a year ago. But downstream operations swung to a loss of $227 million from income of $976 million. Income from chemicals shot up to $2.3 billion from $467 million.

Stock: Shares fell 0.8% to 58.46 on the stock market today. Exxon stock had formed a flat base in late May but shares then fell below the key 50-day line in July, according to MarketSmith chart analysis.

The quarterly results come amid a reckoning with climate change and increasing Covid-19 cases as the Delta variant sweeps through the U.S.

At Exxon’s shareholder meeting on May 26, Engine No. 1 gained ground in its fight to get the U.S. oil major to take a more proactive approach to climate change, which it believes will have major ramifications for Exxon stock.

The hedge fund wants Exxon to pledge to reduce its emissions to net-zero by 2050 and replaced three board members with its candidates. Greg Goff, ex-CEO of refiner Andeavor, environmental scientist Kaisa Hietala, and Alexander Karsner, a strategist at Google’s Alphabet (GOOGL), will join the 12-person board.

Chevron Earnings

Estimates: Analysts saw Chevron earnings per share of $1.59 vs. a year-ago loss of $1.59, with revenue jumping 169% to $36.33 billion.

Results: Adjusted Chevron earnings came in at $1.71 a share with revenue up 179% to $37.60 billion. Net oil-equivalent production grew 5% to 3.13 million barrels per day.

Upstream operations had income of $3.2 billion vs. a loss of $6.09 billion a year ago. Downstream operations earned $839 million after losing $1.01 billion.

Chevron said it will resume buybacks in the third quarter, with annual repurchases of $2 billion to $3 billion.

Stock: Shares climbed 0.7% to 103.727. Chevron stock has consolidated to form a flat base with a 113.22 entry point after finding support around its 50-day line, according to MarketSmith chart analysis.

The Dow Jones oil major has seen its own push from investors to address climate change. Over half of Chevron shareholders supported a resolution in May to set targets to reduce emissions.

Chevron invested heavily in the Permian Basin ahead of the coronavirus pandemic and oil price collapse. It also found acquisition opportunities last year. But the lure of the Permian may be fading for oil majors. Chevron is reportedly looking at selling more than $1 billion assets in the basin, Reuters reported in late June, citing three sources.

Meanwhile, BP (BP) and ConocoPhillips (COP) will report on Aug. 3.

Follow Gillian Rich on Twitter for energy news and more. 

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