A view of the Exxon Mobil refinery in Baytown, Texas.
Jessica Rinaldi | Reuters
Exxon Mobil on Friday reported a third consecutive quarter of losses due to declining oil demand caused by the coronavirus pandemic that weighed on the company’s operations.
In the third quarter, the company lost $ 680 million, although Exxon said results improved quarter-on-quarter thanks to “an early stage of demand recovery.”;
On an adjusted basis, Exxon lost 18 cents per share in the quarter while generating $ 46.2 billion in revenue. According to estimates from Refinitiv, The Street is expected to lose 25% per share and 46.01 billion in revenue.
A year earlier, the company earned 75 cents per share on $ 65.05 billion in revenue. In Q2 2020, Exxon lost 70 cents / share on an adjusted basis, while revenue reached $ 32.61 billion.
“We remain confident in our long-term strategy and business fundamentals, and are taking the necessary actions to preserve value while protecting the balance sheet and dividends. “, Chairman and CEO Darren Woods said. “We are on track to meet our 2020 cost-cutting goal and are making further savings next year as we manage to go through this unprecedented cycle of decline.”
Exxon had previously announced a reduction in its capital spending program – from $ 33 billion to $ 23 billion – and the company said it was ahead of the plan due to increased efficiency and slower project speed, among different things. The company is aiming to spend between $ 16 billion and $ 19 billion in its 2021 capital program.
Exxon also said on Thursday it plans to reduce about 1,900 employees in the US, with global workforce reductions likely to rise to 15%. As of the end of 2019, Exxon has a global workforce of 88,300 people, including 13,300 contractors.
As oil and gas companies grappled with the continued loss of demand from Covid-19, a number of firms announced a dividend cut in an attempt to cut costs.
Exxon has repeatedly said its dividends are still a priority, and on Wednesday the company maintained its fourth-quarter dividend at 87 cents per share. But this is the first time since 1982 that the company has not increased payouts. The company now has a profit of 10.56%.
Research firm Edward Jones notes that there is growing risk that Exxon will have to cut its dividend by 2021 if demand does not fully recover.
It has been a tough few months for Exxon. In August, the company was removed from the Dow Jones Industrial Index. Chevron recently overtook Exxon for the first time to become America’s most valuable energy company based on its market capitalization, despite its higher current market valuation. Chevron also reported a tough quarter on Friday.
Exxon shares were flat on Friday’s pre-market session. For 2020, stocks are down 52%.
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