ExxonMobil’s Earnings Fall but Upstream Volumes Rise

ExxonMobil (XOM) posted its second-quarter results on August 2. In the second quarter, ExxonMobil’s revenues fell 6% YoY to $69.1 billion. Further, ExxonMobil’s earnings per share reached $0.73 in Q2 2019 compared to $0.92 in Q2 2018. ExxonMobil’s earnings included $0.12 per share of tax benefit in the second quarter.

ExxonMobil’s Earnings Fall but Upstream Volumes Rise

ExxonMobil’s earnings review

ExxonMobil’s earnings fell 21% YoY to $3.1 billion in the second quarter. This fall in profits was due to lower earnings from its Downstream and Chemical segments. However, ExxonMobil’s Upstream segment’s earnings rose in the quarter.

ExxonMobil’s upstream earnings rose 7% YoY to $3.3 billion in the second quarter. These earnings rose due to higher hydrocarbon production, partially offset by lower realizations. ExxonMobil’s total hydrocarbon production rose 7.2% YoY to 3.91 million barrels of oil equivalent per day in the second quarter. This rise was led mainly by higher liquids output at the Permian Basin and Hebron.

However, ExxonMobil’s earnings in its Downstream segment fell 38% YoY to $451 million. This fall was driven by a lower margin and higher maintenance activities. The company had planned a turnaround at its Joliet refinery.

Plus, the company had unplanned disruptions at its Baytown, Sarnia, and Yanbu refineries. Also, ExxonMobil’s Chemical earnings fell 79% YoY to $188 million, mainly due to weaker margins. Plus, higher turnaround activities impacted the Chemical segment’s earnings.

Peers’ performance

Among ExxonMobil’s peers, Royal Dutch Shell’s (RDS.A) earnings fell to a two-year low. Shell’s adjusted EPS of $0.84 missed analysts’ estimate in the second quarter. Total SA’s (TOT) earnings slumped and fell short of analysts’ estimate by 10%.

Although Suncor Energy’s (SU) EPS also missed its estimate by 11%, its earnings rose in the quarter. However, BP’s (BP) earnings surpassed analysts’ estimate by about 7%.

ExxonMobil’s shareholder returns

ExxonMobil’s dividends have risen in the past several years. In the third quarter, ExxonMobil will pay $0.87 per share on September 10. The company announced the dividend on July 31. ExxonMobil has paid regular and growing dividends for more than three decades. In the second quarter, ExxonMobil paid $3.7 billion in dividends compared to $3.5 billion in Q2 2018.

ExxonMobil’s dividend yield stands at 4.7%. BP (BP), Royal Dutch Shell (RDS.A), and Total (TOT) have higher yields of 6.2%, 6.0%, and 5.6%, respectively. However, Equinor (EQNR), Chevron (CVX), and Suncor Energy (SU) have lower yields of 5.3%, 3.9%, and 4.5%, respectively.