Exxon, Chevron Earnings on Deck Friday Morning

April 26, 2018 by Paul Ausick

Before markets open Friday, the two energy producers among the 30 Dow Jones industrial stocks will be reporting first-quarter results. Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: COP) are both expected to show higher revenues and profits, largely as a result of higher commodity prices. But there are other issues at play as well.

Exxon is expected to report earnings per share (EPS) $1.13 and revenues of $63.6 billion, compared to EPS of $0.95 and of $63.29 billion in the same quarter of last year. On Wednesday Exxon boosted its dividend by 6.5% to $0.82 per share, and that gave the share price a shot in the arm that continued through to Thursday’s session.

Analysts expect Chevron to report first-quarter EPS of $1.49 on revenues $40.7 billion, compared to year-ago EPS of $1.23 and revenues of $33.42 billion. Chevron’s annual dividend of $4.48 remains more than a third higher than Exxon’s new dividend payment. Exxon may never catch up, but it won’t be for lack of trying.

In the fourth quarter of 2017, Exxon’s price realization for liquids rose by $10 a barrel year over year and, excluding a tax benefit and impairment charges, profits rose by $1 billion to $2.5 billion, even though production slipped by 130,000 barrels a day. Both those numbers should improve in the first quarter.

Chevron’s U.S. price realizations rose by $10 a barrel in the fourth quarter but U.S. production slid by 11,000 barrels a day. Globally production rose by 7,000 barrels a day.

In both companies’ downstream businesses (refining and marketing), it’s reasonable to expect lower profits because of rising crude prices. Refinery throughput was high in the United States through most of the first quarter and a lot of the refined product was put onto tankers and shipped to foreign buyers. Refined product shipments hit a record high last week, and the trend for more overseas sales likely will continue because pricing is stronger for exported barrels priced against the Brent benchmark.

In the late morning Thursday, Exxon stock traded up 0.7% to $80.08, in a 52-week range of $72.16 to $89.30. The 12-month price target on the stock is $85.95.

Chevron shares traded at $123.61, also up about 0.7%, in a 52-week range of $102.55 to $133.88. The consensus price target is $135.88.

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