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Exxon Misses Q4 Estimates On Low Prices

After Chevron badly missed on its Q4 last Friday, another oil supermajor missed analysts estimates today: ExxonMobil Corporation (NYSE:XOM) reported fourth-quarter earnings below analyst expectations and cited the prolonged downturn in commodity prices and a US$2-billion impairment charge on U.S. natural gas assets as negative impacts on its financial results.

Exxon’s earnings in the fourth quarter came in at US$1.68 billion, down by 40 percent annually. Earnings per common share assuming dilution dropped to US$0.41 from US$0.67 for the fourth quarter of 2015. The Q4 2016 earnings compare to consensus estimates of US$0.70.

The supermajor said that an asset recoverability review in the fourth quarter resulted in a U.S. upstream asset impairment charge of around US$2 billion, mostly related to dry gas operations with undeveloped acreage in the Rocky Mountains region.

Exxon’s revenues increased to US$61.016 billion in the fourth quarter from US$59.807 billion for the same period of 2015, but again, missed estimates for revenues of US$62.28 billion.

Earnings for the whole of 2016 plunged 51 percent to US$7.84 billion, or earnings per common share assuming dilution of US$1.88. Analysts were looking for full-year earnings of US$2.19.

Related: Fundamentals Be Damned – Oil Price Correction Likely

Commenting on the financial performance, chairman and CEO Darren W. Woods said:

“Financial results for the year were negatively impacted by the prolonged downturn in commodity prices and the impairment charge.”

For 2016, Exxon’s oil-equivalent production was down slightly at 4.1 million oil-equivalent barrels per day, with liquids up 0.9 percent and natural gas down 3.7 percent.

Like with many other oil majors, capital and exploration expenditures at Exxon were sharply down last year, with Q4 expenditures down 35 percent annually to US$4.829 billion, and full-year spending down 38 percent at US$19.304 billion.

Still, Exxon’s dividends per share of US$0.75 for the fourth quarter increased by 2.7 percent compared to the fourth quarter of 2015.

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By Tsvetana Paraskova for Oilprice.com

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