ExxonMobil (XOM) Misses Q2 Earnings & Revenue Estimates

ExxonMobil Corporation (NYSE:XOM) posted second-quarter 2016 earnings of 41 cents per share, widely missing the Zacks Consensus Estimate of 64 cents. The bottom line, also, deteriorated from $1.00 per share in the year-ago quarter. The impact of sharply lower commodity prices and weaker refining margins was partly offset by strong Chemical results.

Total revenue in the quarter decreased to $57,694 million from $74,113 million in the year-ago quarter. The top line also came in below the Zacks Consensus Estimate of $59,834 million.

Operational Performance

Upstream: Quarterly earnings for the segment declined $1.7 billion from the second quarter of 2015, to $294 million. Lower liquids and gas realizations affected earnings by $2.2 billion. However, sales mix effects increased earnings by $50 million.

Production averaged 3.957 million barrels of oil-equivalent per day (MMBOE/d), down 0.6% year over year. Liquids production totaled 2.3 million barrels per day, up 39,000 barrels per day. Project ramp-up was partly offset by field decline and downtime mainly resulting from the Canadian wildfires. Natural gas production was 9.8 billion cubic feet per day, down 366 million cubic feet per day from the prior-year period.

Downstream: The segment recorded profits of $825 million, down $681 million from the second quarter of 2015. Weaker margins decreased earnings by $850 million. Volume and mix effects increased earnings by $130 million.

ExxonMobil's refinery throughput averaged 4.2 million barrels per day (MMBPD), down 4.1% from the year-earlier level.

Chemical: This unit contributed approximately $1.2 billion, which is $29 million lower than the second quarter of 2015. Improved margins increased earnings by $150 million. Favorable volume and mix effects increased earnings by $70 million. Other items decreased earnings by $250 million, due to the absence of asset management gains in the U.S. partly offset by lower expenses.

Financials

During the quarter, ExxonMobil generated cash flow from operations and asset sales of $5.5 billion. The company returned $3.1 billion to shareholders through dividends. Capital spending decreased 38% year over year to $5.2 billion.

Zacks Rank

ExxonMobil currently has a Zacks Rank #2 (Buy). Other players from the energy sector that can be considered include Vanguard Natural Resources, LLC (NASDAQ:VNR) , QEP Resources, Inc. (NYSE:QEP) and McDermott International Inc. (NYSE:MDR) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).