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Exxon Mobil Corp. and Chevron Corp. relied on the strength of their chemicals businesses to turn out higher profit and sales than Wall Street expected.
Exxon
XOM,
and Chevron
CVX,
reported second-quarter earnings earlier Friday, and shares rose in premarket.
The stocks fell later on, however, tracking the broader equity market and deeper losses for other energy names on concerns about the delta variant hampering a recovery. See Market Snapshot and Coronavirus Update columns.
At Exxon, chemicals profit was at a record, analyst Pavel Molchanov with Raymond James said in a note Friday.
Per-share results came in a little better than the Street was expecting, and a $10 billion cash flow was “strong,” allowing the company to pay down debt and continue to secure its dividend and capital expenditure plan.
Overall, it was “another solid result showing operational momentum,” he said. chemicals earnings came in at $2.32 billion, compared with his expectations of $2.05 billion.
Exxon reported second-quarter profit of $1.10 a share on sales of $67.7 billion, which compared with FactSet consensus of EPS of $1.01 on sales of $64.6 billion.
Exxon, as one of the few integrated oil companies, also makes a variety of oil-derived products used in industrial and consumer applications, such as flexible PVC used in rain boots and rubber duckies.
Likewise at Chevron, “very strong chemicals earnings were the primary driver
of upside, while the other three segments added to the beat with modestly better results,” Alistair Symes at Citi said in this note.
Chevron reported adjusted EPS of $1.71 on revenue of $37.6 billion in the quarter, compared with FactSet consensus for adjusted EPS of $1.59 on revenue of $36.3 billion.
Chevron said it plans to resume stock buybacks in the third quarter, at an annual rate of $2 billion to $3 billion a year. The oil giant also lowered capital expenditures to $13 billion from $14 billion.
Both companies benefited from rising oil prices in the quarter, with U.S.-traded oil futures on track for their fourth straight monthly gain.
Over the past three months, shares of Chevron have slipped 1.3% and Exxon Mobil’s stock has edged up 0.4%, while the SPDR Energy Select Sector exchange-traded fund
XLE,
has eased 0.1% and the Dow Jones Industrial Average
DJIA,
has gained 3.3%.
