Exxon And Chevron Reported Not-So-Slick Earnings

Exxon And Chevron Reported Not-So-Slick Earnings

almost 4 years ago2 mins

Mentioned in story

Chevron and Exxon – the most valuable Western oil producer – reported first-quarter updates on Friday that laid bare the mess the oil industry’s just stepped in 🙄

What does this mean?

There was big news for both big-hitters: Exxon unexpectedly announced its first quarterly loss in 32 years, while Chevron announced a better-than-expected first quarter, having, perhaps counterintuitively, increased its oil production to a record level.

Daily Brief Image

The oil markets have been weighed down lately, both by low demand as a result of shrinking economic growth and by under-pressure oil prices as a result of overproduction and a lack of storage 🛢 So oil companies all over the world are looking for ways to limit losses and save cash. Exxon and Chevron are no exception: the former announced a 30% cut to its spending plans, while the latter announced its second cut in six weeks. Luckily for investors, neither has cut its sacrosanct dividends – yet.

Source: The Wall Street Journal
Source: The Wall Street Journal

Why should I care?

Given the low oil price, Chevron might’ve preferred to produce less of the dusky fluid last quarter. But an oil rig in motion is a hard (and expensive) thing to stop. Exxon faces similar challenges: it's spent billions sourcing oil around the world, and the company's been left holding a very expensive baby it now can’t sell on for as much 👶 All that baby-holding might be why the US government’s now considering a bailout cradle for the entire industry.

Shares of Exxon have lost 38% this year
Shares of Exxon have lost 38% this year

European oil major Shell cut its dividend last week for the first time since World War II, and other oil firms are likely to follow suit. But rather than take it as a negative sign for the oil industry as a whole, analysts at Goldman Sachs reckon it’ll throw up new opportunities altogether 🌎 Their report on Friday suggested lower dividends and, as a result, more financial flexibility could lead to more mergers and acquisitions – particularly in the renewable industry.

Daily Brief Image
Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG