Aristocratic hubris

31 July 2020 By Antony Currie Follow @AntonyMCurrie

Darren Woods’ business is already more indebted and capital intensive than Chevron or ConocoPhillips. Now he wants to slash costs to save Exxon’s annual dividend. It’s unsustainable even in purely financial terms: The $177 bln oil major’s performance no longer supports it.

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Exxon Mobil on July 31 reported a second-quarter loss of $1.1 billion, or 26 cents a share. Excluding a $1.9 billion non-cash gain from rising commodity prices, the loss was 70 cents a share, compared to the mean estimate of sell-side analysts for a loss of 56 cents a share, according to Refinitiv data.

Revenue of just under $33 billion was 53% lower than the same period last year. Analysts on average had estimated just over $38 billion.

On the same day Chevron reported results for the three months to the end of June. It lost $8.3 billion, or $4.44 a share. Adjusted to exclude the write-down of its Venezuela business, downward revisions in its commodity price outlook, severance costs and the sale of an asset in Azerbaijan, the company lost $3 billion, or $1.59 a share. That compares with the mean estimate of sell-side analysts for a loss of 92 cents a share.

Revenue of $13.5 billion was 65% lower than last year’s second quarter; the mean estimate was for $22 billion.

ConocoPhillips on July 30 reported second-quarter earnings of $260 million, or 24 cents a share, thanks to gains from an asset sale and its equity stake in Canadian producer Cenovus Energy. Excluding these items the company lost almost $1 billion, or 92 cents a share. The mean estimate of sell-side analysts was for a loss of 58 cents a share.

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