Retail

Exxon, Chevron first-quarter earnings expected to dip from last year


© Reuters. FILE PHOTO: The Exxon Mobil gas station in Denver

By Laila Kearney

NEW YORK (Reuters) – Exxon Mobil and Chevron are expected to report lower quarterly earnings per share when compared with last year’s first quarter, though their stocks have outperformed smaller companies with both in the midst of aggressive expansion plans in shale oil.

A combination of lower oil prices, weakness in liquefied (LNG) portfolios and lacklustre refinery margins could hurt integrated oil companies across the board, analysts said ahead of results announcements on Friday.

“We’re not looking for a great first quarter for the group,” said Blake Fernandez, senior research analyst with Piper Jaffray & Co’s Simmons Energy.

Still, shares of both companies have performed well in recent months amid extensive efforts to boost investment in the Permian region of west Texas and New Mexico, where heavy production has driven output to an all-time record of more than 12 million barrels per day.

Shares of Exxon Mobil Corp (NYSE:) have rallied about 20 percent since the start of the year, while Chevron Corp (NYSE:) stock has risen roughly 10 percent.

Exxon, the world’s largest publicly traded oil producer, is expected to earn 69 cents a share, down from $1.09 a year ago. Revenues are expected to come in at $64.8 billion (£50.2 billion), down 5 percent from a year ago, according to Refinitiv Eikon estimates.

Chevron is forecast to earn $1.30 a share, down from $1.90 a year ago, even as revenue is expected to rise by 1.7 percent to $38.4 billion, Refinitiv data shows.

Read More   Oil Pares Bear Market Collapse on Prospect of OPEC Curbs in 2019

Weakness in the sector’s shipping and chemical businesses could weigh on results in coming quarters, as those units “could become more challenging in 2019,” J.P. Morgan said in a note on Exxon this month. The bank has a neutral rating on Exxon.

Exxon’s fourth-quarter Permian oil and gas output was 300,000 bpd; it plans to boost that to more than 1 million bpd by 2024, it said last month.

Chevron has bid $33 billion to take over Anadarko Petroleum (NYSE:) to expand its reach. On Wednesday, rival Occidental (NYSE:) bid $38 billion on Anadarko, kicking off the first takeover battle for an oil company in years.

U.S. oil prices are up more than 40 percent since late last year and refinery margins have improved, which could help position the majors for better results ahead, said Fernandez of Piper Jaffray & Co’s Simmons Energy.

“If you get some weak results, shares might trade weaker on that day, but I think investors are largely going to be able to brush that off,” Fernandez said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Read More   Why Starbucks isn't all that popular in South Africa

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.