Exxon Mobil Corporation’s XOM second-quarter 2018 earnings missed estimates, thanks to a plunge in oil equivalent production. The rise in energy and feedstock cost and significant maintenance and turnaround work hurt the bottom line. This was partially offset by increased price realizations from liquids.
The company’s earnings per share of 92 cents missed the Zacks Consensus Estimate of $1.26. The stock lost almost 4% in pre-market trading following the earnings miss. Chevron Corp. CVX is another energy player which lagged estimates this earnings season.
However, the bottom line improved from the year-ago quarter level of 78 cents.
Total revenues in the quarter rose to $73,501 million from $58,077 million a year ago. Moreover, the top line surpassed the Zacks Consensus Estimate of $70,252 million.
Exxon Mobil Corporation Price, Consensus and EPS Surprise
Exxon Mobil Corporation Price, Consensus and EPS Surprise | Exxon Mobil Corporation Quote
Operational Performance
Upstream: Quarterly earnings were recorded at $3 billion, up from $1.2 billion in the year-ago quarter. Increased price realizations from liquids drove the upside. A rise in expenses partially affected the results.
Despite ramped up oil equivalent volumes in Permian and Bakken regions, total production averaged 3.647 million barrels of oil-equivalent per day (MMBOE/d), lower than 3.922 MMBOE/d in the year-ago quarter.
Liquid production fell year over year to 2.212 million barrels per day (MMB/D) from 2.269 MMB/D. Moreover, natural gas production was 8.613 MMCF/d (millions of cubic feet per day), down from 9.920 MMCF/d in the year-ago quarter.
Downstream: The segment recorded profits of $724 million, significantly lower than $1.4 billion for the April-to-June quarter of 2017. The segment’s performance was marred by lower throughput volumes owing to significant maintenance and turnaround activity.
ExxonMobil's refinery throughput averaged 4.1 million barrels per day (MMB/D), lower than the year-earlier level of 4.4 MMB/D.
Chemical: This unit contributed to the company’s $890 million profit, down from $985 million in the prior-year quarter, thanks to a surge in energy and feedstock expenses.
Financials
During the quarter under review, ExxonMobil generated cash flow of $8.1 billion from operations and asset divestments, higher than $7.1 billion in the year-ago quarter. The energy giant returned $3.5 billion to shareholders through dividends. Capital and exploration spending rose roughly 69% year over year to almost $6.6 billion.
Other News
Separately, the company announced the commencement of ethane cracker in Baytown, TX. The new cracker is expected to have the capacity to supply ethylene feedstock at the rate of 1.5 million ton every year.
Zacks Rank & Stocks to Consider
ExxonMobil carries a Zacks Rank #3 (Hold). A couple of better-ranked players in the energy space are McDermott International, Inc. MDR and Murphy Oil Corp. MUR. While Murphy Oil carries a Zacks Rank #2 (Buy), McDermott sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
McDermott’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average positive surprise being 73.6%.
Murphy Oil’s bottom line surpassed the consensus mark in each of the last four quarters, the average positive surprise being 102.5%.
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