ExxonMobil is keeping its quarterly fourth-quarter dividend flat at $0.87 per share - the first time in 38 years that the company has failed to increase the dividend that it has been paying for more than 100 years.
Exxon, which is reporting Q3 earnings on Friday, had increased its dividend in Q1 ad Q2 this year, despite the oil price crash and the back-to-back losses that it reported for the first and second quarters. Exxon, as well as Chevron, hadn't touched shareholder payouts, unlike their European rivals Shell, Equinor, BP, and Eni, which slashed dividends earlier this year amid massive losses in Q1 and Q2 following the price and demand crash and reductions in oil price assumptions for both the short and the long term.
Analysts have been wondering how long Exxon would be able to keep raising its dividend and continue to be one of the so-called dividend aristocrats, companies that have continuously increased dividends for 25 years or more.
"We have doubts about the sanctity of the dividend longer-term," Jennifer Rowland, an analyst with Edward Jones, told Reuters.
"There is greater potential for a dividend reduction in 2021 if demand doesn't fully recover," Rowland added.
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While not cutting the dividend, Exxon is not lifting the payouts to shareholders for the first time since 1982, suggesting that the supermajor has exhausted many of the other options to cut costs.
For the third quarter, Exxon is set to post its third straight loss in its upstream business this year as lower oil demand continues to hurt oil companies' profitability.
For the second quarter, Exxon reported at the end of July its second consecutive quarterly loss, which was the worst loss for the U.S. supermajor in its modern history.
By Josh Owens for Oilprice.com
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Josh Owens is the Content Director at Oilprice.com. An International Relations and Politics graduate from the University of Edinburgh, Josh specialized in Middle East and… More