ExxonMobil’s (XOM) earnings have fallen 53% YoY in its third-quarter results. Analysts expected a 54% YoY fall in the company’s profits. So, ExxonMobil’s earnings have marginally beat analysts’ estimates. The company’s earnings have fallen across its business segments despite the better-than-expected performance.
ExxonMobil’s reported EPS fell 49% YoY to $0.75 in the third quarter. However, adjusting for a tax-related item, ExxonMobil’s EPS was $0.68—slightly higher than analysts’ estimate of $0.67. The company’s revenues fell 15% YoY to $65.1 billion—slightly more than the estimate of $64.8 billion.
So, ExxonMobil’s earnings beat analysts’ forecast. The earnings could have a positive impact on ExxonMobil stock. In pre-market trading today, the stock is trading about 0.6% higher.
ExxonMobil’s segmental performance
ExxonMobil’s earnings have fallen 49% YoY in its upstream segment, 25% YoY in its downstream segment, and 66% YoY in its chemical segment.
In the upstream segment, lower realizations were partly offset by better hydrocarbon production. ExxonMobil’s upstream earnings fell from $4.3 billion in the third quarter of 2018 to $2.2 billion in the third quarter. Among the $2.0 billion YoY decline, about $1.5 billion was due to lower oil and gas prices, which impacted realizations. However, ExxonMobil’s upstream production rose from 3.79 MMboed (million barrels of oil equivalent per day) in the third quarter of 2018 to 3.90 MMboed in the third quarter. The company’s volumes rose due to a more than a 70% YoY rise in Permian production.
In the downstream segment, the earnings were impacted by a decline in margins and maintenance activities. ExxonMobil’s downstream earnings fell from $1.6 billion in the third quarter of 2018 to $1.2 billion in the third quarter. Among the $412 million decline, about $340 million was due to lower margins. So, downtime had a minimal impact since most of the maintenance activity ended in the previous second quarter.
However, the company’s chemical earnings fell from $713 million in the third quarter of 2018 to $241 million in the third quarter. Like the downstream segment, lower margins mainly impacted the chemical segment. Among the $472 million fall in the segment’s earnings, about $350 million was due to lower margins. Also, higher project-related expenses impacted the company’s chemical earnings domestically.
ExxonMobil’s peers have also posted better-than-expected results. Royal Dutch Shell’s (RDS.A) earnings fell 15% YoY—less than analysts’ expectation of a 26% YoY fall. BP’s (BP) earnings fell 41%—less than the expected fall of 48%.
Shell’s earnings only fell in its upstream segment. Surprisingly, the company’s profits grew in downstream and integrated gas segments due to higher trading activity. Also, wider marketing fuel margins supported Shell’s downstream earnings. To learn more, read Shell’s Earnings Positively Surprise Wall Street.
However, like ExxonMobil, BP’s earnings fell in all of its business segments. The company’s upstream adjusted EBIT fell the most by about 47% YoY. The downstream and Rosneft segments fell 11% and 8%, respectively. To learn more, read BP’s Q3 Earnings Slump but Beat the Estimate.
Chevron (CVX) will release its earnings today. Analysts expect the company’s earnings to fall 31% YoY in the third quarter.