Exxon Mobil Corporation (NYSE:XOM) posted lower-than-expected earnings in first-quarter 2018, thanks to plunge in oil equivalent production, decreased refinery throughput and lower margins at the chemical business. This was partially offset by increased price realizations from liquids.
The stock lost more than 5% in pre-market trading following the earnings miss.
The company reported earnings of $1.09 per share, which missed the Zacks Consensus Estimate of $1.14. However, the bottom line increased from the year-ago quarter level of 95 cents.
Total revenues in the quarter rose to $68,211 million from $58,671 million a year ago. Moreover, the top line surpassed the Zacks Consensus Estimate of $66,070 million.
Dividend Hike
On Apr 25, the largest privately traded energy giant’s board of directors approved a hike in the quarterly dividend. The second-quarter 2018 dividend was 82 cents per share, higher than 77 cents in the first quarter.
Operational Performance
Upstream: Quarterly earnings were recorded at $3.5 billion, up from $2.3 billion in the year-ago quarter. Increased price realizations from liquids drove the upside. A rise in expenses partially affected the results.
Production averaged 3.889 million barrels of oil-equivalent per day (MMBOE/d), lower than 4.151 MMBOE/d in the year-ago quarter.
Liquid production fell year over year to 2.216 million barrels per day. Moreover, natural gas production was 10.038 MMCF/d (millions of cubic feet per day), down from 10.908 MMCF/d in the year-ago quarter.
Downstream: The segment recorded profits of $940 million, significantly lower than $1.1 billion for the January-to-March quarter of 2017. A drop in throughput volumes and lower margins primarily affected the segment. Fall in turnaround expenses negated the downfall partially.
Exxon Mobil's refinery throughput averaged 4.3 million barrels per day (MMB/D), marginally lower than the year-earlier level.
Chemical: This unit contributed to the company’s $1.01 billion profit, down from $1.2 billion in the prior-year quarter, thanks to the lower margins.
Financials
During the quarter under review, Exxon Mobil generated cash flow of $9.9 billion from operations and asset divestments, marking the highest level since 2014. The energy giant returned $3.3 billion to shareholders through dividends. Capital and exploration spending rose roughly 17% year over year to almost $4.9 billion.
Q1 Price Performance
In first-quarter 2018, ExxonMobil fell 10.7%, underperforming the industry’s 4% decline.
Zacks Rank & Key Picks
Exxon Mobil has a Zacks Rank #3 (Hold). A few better-ranked players in the energy space are Mammoth Energy Services, Inc. (NASDAQ:TUSK) , Baytex Energy Corp. (TO:BTE) and EOG Resources, Inc. (NYSE:EOG) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Mammoth Energy is expected to see a year-over-year rise of 246.5% in 2018 earnings.
Baytex managed to beat the Zacks Consensus Estimate in each of the last three quarters.
EOG Resources is likely to see year-over-year earnings growth of 317.9% in 2018.
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