ExxonMobil Foresees Q3 Earnings Slump On Weak Crude Prices
Zacks Investment Research | Oct 03, 2019 07:37AM ET
Exxon Mobil Corporation (NYSE:XOM) recently announced that weakness in crude prices will hurt its third-quarter earnings. Following the announcement, the integrated energy player’s share price slid 2.6%.
Through the September quarter of 2019, price of West Texas Intermediate and Brent crude plunged 8.5% and 8.9%, respectively. Ramped-up production from U.S. shale resources, especially in the Permian, and weak global crude demand owing to intensified trade tensions between Washington and Beijing, impacted commodity prices.
The drop in oil prices is likely to clip ExxonMobil’s third-quarter 2019 profit from its upstream operations. The latest SEC filing revealed that the company expects total quarterly earnings from upstream businesses, including the domestic market and abroad, to decline roughly 45% from the September quarter of 2018.
ExxonMobil also anticipates its third-quarter 2019 profit from downstream businesses to slump 70% from the year-ago period.
As a whole, the energy giant projects total profit decline of 50% to $3.1 billion from the prior-year quarter, owing to underperformance in both upstream and downstream businesses. The underperformances are getting reflected in the Zacks Consensus Estimate for ExxonMobil’s third-quarter 2019 earnings per share which is pegged at 88 cents, calling for a year-over-year decline of 40%.
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