Before the market opened on Friday, July 28, Exxon Mobil’s quarterly earnings were reported. Despite falling marginally short of analyst expectations, it did double from the 2016 period.
At mid morning, Exxon (NYSE:$XOM) shares were down 2%. Additionally, the stock dropped 2% in premarket trading.
The Irving, Texas-based company earned $3.4 billion (78 cents a share) in Q2, compared with $1.7 billion (41 cents a share) in the 2016 period.
The oil major reported $62.9 in revenue, which is significant as it is up 9% from $57.7 billion. Analysts had forecast that Exxon would report earnings of 84 cents a share on $61.9 billion in revenue.
“These solid results across our business were driven by higher commodity prices and a continued focus on operations and business fundamentals,” CEO Darren Woods said. “Our job is to grow long-term value by investing in our integrated portfolio of opportunities that succeed regardless of market conditions.”
Exxon continues to drive down costs amongst a tough privet environment. Their spending on capital expenditures and exploration dropped 24% to $3.9 billion. Furthermore, the company’s cash flow – generated by its operations – was $6.9 billion, which is up from $4.6 billion in the 2016 period.
The upside sector, including exploration and oil production, came in at $1.2 billion, which is an increase of $890 million, as Exxon’s gas and oil yielded a higher price.
Additionally, Exxon’s earnings in its downstream business increased $560 million to $1.4 billion. This is thanks to better margins in its operations in the segment, including refining crude oil into fuels.
Notable Q2 Events
This week, Exxon announced that it made a significant oil discovery off the coast of Guyana in South America, which is a key growth region for Exxon. Last month, Exxon made the decision to develop the first phase of the Liza field, and they are projecting it will start producing in the year 2020.
In May, Exxon would begin operating Mobil-branded gas stations in Mexico in the second half of 2017.
However, the company experienced a number of headwinds in Q2. Shareholders had approved a vote asking Exxon to announce risks to its business caused by climate change initiatives.
In addition, the trouble continued last week when the Treasury Department fined the company for violating sanctions against Russia.
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