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Exxon Dissappoints With Q4 Earnings 

ExxonMobil (NYSE:XOM) reported on Friday adjusted earnings per share (EPS) of $0.88, badly missing Wall Street estimates, and reported cash flow for the whole 2017 lower than that of Shell.

Exxon’s EPS for the fourth quarter, excluding the favorable one-time impact of the U.S. tax reform, were way lower than the analyst consensus of $1.03.

Earnings excluding U.S. tax reform and impairments were $3.7 billion, down 2 percent compared with the prior-year quarter.

Exxon’s Q4 revenues also missed forecasts, by a lot--at $66.515 billion they were below expectations of $74.31 billion.

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Cash flow from operations and asset sales was $8.8 billion in the fourth quarter, and cash flow from operations and asset sales came in at $33.2 billion for the full year 2017, including proceeds associated with asset sales of $3.1 billion.

This means that Shell—which reported yesterday cash flow from operations surging to $35.65 billion in 2017—is now the king of the cash flow among the world’s supermajors.

Exxon also missed analysts’ production estimates, saying that oil-equivalent production was 4 million barrels per day (bpd) in Q4 and full-2017. Wall Street had expected 4.165 million bpd of oil equivalent production.

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In pre-market trade at 8:54 a.m. EST on Friday, Exxon shares were down 3.03 percent on the NYSE.

Exxon reported big non-cash benefits from the U.S. tax reform and said that remeasurement of deferred income tax liabilities from the 35 percent rate to 21 percent results in a one-time non-cash benefit to earnings.

Related: Can The Shale Boom Avoid These Bottlenecks?

“The impact of tax reform on our earnings reflects the magnitude of our historic investment in the U.S. and strengthens our commitment to further grow our business here,” Darren W. Woods, chairman and CEO, said.

Earlier this week, ExxonMobil unveiled plans to triple its total daily production from the Permian to more than 600,000 oil-equivalent barrels by 2025, with tight oil production from the Delaware and Midland basins planned to increase five-fold. Thanks to the U.S. tax overhaul, Exxon also plans to invest over $2 billion in transportation infrastructure to support its Permian operations.

Since early 2014, Exxon has doubled its footage drilled per day on horizontal wells in the Permian and reduced per-foot drilling costs by about 70 percent, the company said.

By Tsvetana Paraskova for Oilprice.com

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