Exxon Mobil Corp has reported Friday a $1.1 billion loss in the second quarter on falling energy demand and prices from the unabated economic pain continuously brought by the coronavirus pandemic. Exxon has confirmed proposals to make broader spending cuts as a result of the crisis.
Prices of crude have plunged over a quarter so far this year and even briefly dropped under $0 at one point, sending shivers to traders around the globe. Oil prices have been up in the past weeks, however, and they are now floating roughly $40 per barrel.
The decline was Exxon's first back-to-back loss for the quarter in more than three decades but was small compared to competitors who imposed humongous charges last quarter. The leading American oil producer took no asset write-downs for the quarter and received a 44-cent per share lift to earnings by hiking the value of its reserves.
Exxon chairman and chief executive officer Darren Woods said the worldwide coronavirus turmoil and oversupply conditions "significantly impacted our second-quarter financial results with lower prices, margins, and sales volumes," Paul La Monica quoted Woods as saying in a CNN Business report.
Exxon shed 70 cents a share on an adjusted basis, while sales have been pegged at $32.61 billion. In the same quarter from last year, the company gained 73 cents a share, on $69.09 billion revenue. Analysts estimated the energy group to post a loss of 61 cents a share for the second quarter, and $38.157 billion sales, projections by Refinitiv showed.
The company's stocks were marked 2 percent lower during the early sessions Friday after the earnings report to change hands at $41.06 apiece, a move that would stretch the stock's year-to-date drop to about 40 percent.
Woods pointed out that they have pushed their debt up to a level that they believe is appropriate to provide liquidity, considering current market volatility. Based on current estimates, Woods said they don't plan to take on any extra debt.
The energy giant has identified the major potential for further cuts and is initiating a comprehensive analysis across the businesses on a country-to-country basis. More details will be given out when plans are finalized, the company said.
Exxon has trimmed down its capital expenditure by around 30 percent this year to about $23 billion, and Senior Vice President Neil Chapman disclosed the company expects to shell out less than $19 billion for 2021. That would be the energy group's lowest spending since at least 2005.