Exxon Mobil and Dow Jones' Chevron reported lower-than-expected earnings for the third quarter on Friday morning. Both energy giants reported quarterly profits that were down more than 40% compared to earnings in 2022, when oil prices spiked.
Exxon Mobil had announced, ahead of their earnings, that they were making significant moves to strengthen their positions in the Permian basin and South America. Chevron's acquisition of Hess and Exxon Mobil’s deal with Pioneer Natural Resources mark the most intense consolidation within the oil industry in over two decades.
Exxon Mobil, as well as Chevron, saw record profits in 2022 due to the surge of oil and natural gas. In 2023, the U.S. natural gas and oil prices have risen slightly. U.S. crude oil prices rose around 1.4% on Friday to just below $85 per barrel, despite an uncertain demand outlook. The West Texas Intermediate price rose to $90 per barrel last week as the Middle East impacted the oil market.
Chevron, a Dow Jones stock, fell 6.7% on Friday, to 144.36. CVX fell 0.7% on Thursday to 154.75. ExxonMobil, a stock in the S&P 500 index, fell 1.9% Friday to 105.56. XOM fell 0.9% to 107.60 on Thursday.
Exxon Mobil stock: Earnings
Analysts projected that XOM's earnings would fall by 46%, to $2.37 a share. Revenue is expected to drop 17%, to $93.41 Billion.
Exxon Mobil's earnings fell 49%, to $2.27 per share. Sales dropped 19% to $90.76 Billion.
Exxon Mobil has maintained its global oil production at the same level as in 2022 through Q3. The company's full-year capital expenditures and exploration expenses are expected to be above the $23 billion-$25billion guidance.
According to XOM, the decline in earnings and revenues was due to lower margins as well as a drop in crude oil and natural gas prices. Exxon Mobil announced that the purchase of Pioneer Natural Resources compliments its $5 billion deal with Denbury (DEN).
In the earnings report, Chief Executive Darren Woods stated that "the two transactions we have announced further underline our commitment to the and' equation" by continuing to meet world needs for energy and vital products while reducing emission."
Woods said that Denbury would improve our competitiveness to reduce emissions economically in industries hard to decarbonize.
XOM Stock Performance
Exxon Mobil, a component of the S&P 500, is down 10.2% this month. Its stock has traded below its 50-day average and 200-day average.
JPMorgan maintained its overweight rating for the shares and lowered their XOM target price to 134 from 137 on Wednesday. JPMorgan informed investors that the price correction was based on the equity dilution resulting from the PXD purchase.
Exxon Mobil's Q2 profits dropped 53%, to $1.94 a share. Sales fell 28% to $82.91 Billion. In Q1, Exxon Mobil's earnings increased 36%, to $2.83 a share. Revenue fell 4% to $86.56 Billion.
Exxon Mobil has a Composite Rating of 72. S&P 500 has a Relative Strength rating of 71 and an EPS rating of 32.
Dow Jones Stock: Chevron Earnings
Wall Street had expected Chevron's EPS to drop 33% to $3.70 and sales to decrease 23% to $51.42 Billion.
Results: Chevron's earnings for Friday fell by 45%, to $3.05 a share. Revenue fell 19% to $54.08 Billion.
The company said that the EPS decline was due to lower upstream realisations and lower margins for refined product sales. Chevron also said that its revenue dropped due to lower oil and natural gas prices.
According to the press release, Chevron's net production of oil equivalent was up 4% compared with 2022. This is mainly due to its $6.3 billion purchase of PDC Energy. The U.S. oil production totaled 1,41 million barrels equivalent to oil per day. This is up 20% from 2022 due to PDC's 179,000 barrels-equivalent per day as well as production increases in Permian basin.
Chevron also saw its refinery products sales increase by 4% in response to a higher demand for jet-fuel during the third quarter.
In a Friday earnings release, Chevron's CEO Mike Wirth noted that the company has already returned 20 billion dollars to its shareholders in 2023 - 27% more than in 2022.
Wirth stated that Chevron delivers strong financial results, while investing in profitable growth of its traditional and new energy business to create superior value for the shareholders.
CVX Stock Performance
Chevron's stock price has fallen in six consecutive sessions, falling below the 50-day average and 200-day moving median. CVX has fallen more than 14% since October. Dow Jones is currently in long-term consolidation.
In the second quarter of 2018, Chevron's earnings fell by nearly 50%, to $3.08 a share, with revenues of $48.89 Billion, down 29% from Q2 2022.
Chevron's Q1 revenue was down compared to last year, but the company still exceeded Wall Street expectations. In the first quarter, earnings per share increased by 6% to $3.55. Sales fell 6% to $50.79 billion. The company reported that higher margins on sales of refined products drove the earnings beat. Lower oil prices and increasing production costs were partially offset.
Chevron has a Composite Rating of 48. Dow Jones has a Relative Strength rating of 47 and an EPS rating of 24.