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ExxonMobil: Upstream and Downstream Earnings Rose in Q4

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Feb. 4 2019, Published 8:13 a.m. ET

ExxonMobil’s Upstream earnings

ExxonMobil (XOM) posted its fourth-quarter earnings on February 1. The company beat the earnings estimate. To learn more, read ExxonMobil’s Q4 Earnings Rose, Beat Analysts’ Estimate. Now, we’ll discuss the company’s segmental earnings.

In the fourth quarter, ExxonMobil’s Upstream earnings increased from $2.5 billion in the fourth quarter of 2017 to $3.7 billion in the fourth quarter. The increase was due to the rise in natural gas realizations and an increase in volumes YoY (year-over-year) in the fourth quarter. Henry Hub natural gas prices rose 25% YoY to $3.65 per MMBtu in the fourth quarter. ExxonMobil’s hydrocarbon production rose 0.5% YoY due to growth in the Permian’s liquids volume.

Royal Dutch Shell’s (RDS.A) adjusted Upstream earnings rose from $1.7 billion in the fourth quarter of 2017 to $1.9 billion in the fourth quarter. Chevron’s (CVX) adjusted Upstream earnings rose 68% compared to the fourth quarter of 2017 to $3.3 billion in the fourth quarter.

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Downstream earnings

In the fourth quarter, ExxonMobil’s Downstream earnings rose 187% to $2.7 billion due to wider margins in the United States. The company boosted its margins by using its midstream assets to refine price advantaged North American crude oil. Divestment gains increased the earnings.

However, ExxonMobil’s Chemical segment’s earnings fell 20% compared to the fourth quarter of 2017 to $0.7 billion in the fourth quarter mainly due to lower margins.

Overall, ExxonMobil’s earnings rose from $3.7 billion in the fourth quarter of 2017 to $6.4 billion in the fourth quarter due to higher Upstream and Downstream earnings—partially offset by lower Chemical earnings.

Next, we’ll discuss ExxonMobil’s stock performance after its fourth-quarter earnings.

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