XOM says the results reflect sharply lower commodity prices and weaker refining margins; while the company cut its capital budget by 38% during the quarter to $5.16B, the cuts were not enough to offset depressed oil prices.
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The company reported its smallest quarterly profit in 17 years, well below what analysts were looking for, due to the continuing weakness in oil prices.
Alphabet’s shares surged 4.5 percent to $800 after the company’s second-quarter earnings handily beat analysts’ estimates.
Net income declined to US$1.7 billion (RM6.9 billion), or 41 cents a share, from US$4.19 billion, or US$1, a year earlier, Irving, Texas-based Exxon said in a statement today.
Despite the distress, Chevron just recently approved a US$37-billion expansion of the Tengiz oilfield in Kazakhstan, which it operates in consortium with ExxonMobil and Russia’s Lukoil.
Given the plunge in crude and natural gas markets, “you can not recover, no matter how efficient you are”, Fadel Gheit, an analyst at Oppenheimer & Co., said during an interview with Bloomberg Television. The refining of petrochemical businesses have been a hedge against falling oil prices.
HAVEN’T DRIVEN A FORD LATELY: Ford shares lost $1.38, or 10 percent, to $12.47 after the company reported a 9 percent drop in profits as sales slowed in the USA and struggled in China. Exxon pumped the equivalent of 3.957 million barrels a day during the quarter, according to a statement on Friday (July 29), nearly 3 percent below the 4.069-million average of four analyst estimates. The stock has a weekly performance of -3.48 percent and is 37.67 percent year-to-date as of the recent close.
The world’s biggest oil explorer by market value said wildfires that ravaged the oil-sands region of western Canada as well as aging wells negatively impacted output.
Heating oil rose less than 1 cent to $1.28 a gallon, wholesale gasoline futures rose 1 cent to $1.32 a gallon and natural gas fell was little changed at $2.88 per thousand cubic feet. The impaired assets in Chevron’s upstream business for exploration, development and production aren’t expected to produce enough revenue to cover their costs.
Exxon did not report any share repurchases in the second quarter, but the company paid dividends totaling $3.1 million.
Average crude oil price came in at $36 versus $50 in the corresponding period a year ago (CPLY). The yield on the benchmark US 10-year Treasury note falling to 1.48 percent from 1.51 percent the day before. Exxon fell $1.94 to $88.26 and Chevron fell 16 cents to $101.63.
STRONG SALES: Amazon rose $9.72, or 1.3 percent to $762.64. Amazon reported it sold 30.4 billion dollars in goods in the quarter, up 31% from a year earlier.
BP’s profit, adjusted for one-time items and inventory changes, dropped to $720 million from $1.3 billion a year earlier, the company said on July 26.
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