Exxon Mobil Reports 4th Straight Quarter of Losses
- By Sydnee Gatewood
As it continues to combat depressed demand due to the Covid-19 pandemic, Exxon Mobil Corp. (NYSE:XOM) reported a $20.1 billion loss for the fourth quarter of 2020 before the opening bell on Tuesday.
Despite recording a loss for the fourth consecutive quarter, the Irving, Texas-based oil and gas giant posted adjusted earnings of 3 cents per share, which were ahead of Refinitiv's estimate of a profit of 1 cent. Revenue for the three months ended Dec. 31 declined 30.7% from the prior-year quarter to $46.54 billion, falling short of analysts' expectations of $48.76 billion.
For full fiscal 2020, Exxon Mobil reported an adjusted loss of 33 cents per share on $181.5 billion in revenue, both of which were down from a year ago.
Total production fell 8% from a year ago to 3.7 million barrels of oil equivalent per day during the quarter, while liquids production increased 5% and natural gas volumes rose 2%.
In a statement, Chairman and CEO Darren Woods said that 2020 "presented the most challenging market conditions ExxonMobil has ever experienced."
"While the effects of the pandemic significantly impacted our 2020 results, our previously executed strategic initiatives and reorganizations enabled us to respond decisively to permanently improve our cost structure, drive greater efficiencies across our businesses, and emerge a stronger company," he said.
The company noted its extreme cost-cutting measures, which include global workforce reductions and lower capital spending, are expected to deliver structural expense savings of $6 billion per year by 2023.
Looking to fiscal 2021, Exxon Mobil is anticipating that cash flow will cover capital expenditures as well as maintain the dividend and balance sheet if Brent crude prices remain around $50 per barrel.
"We've built a flexible capital program that is robust to a range of market scenarios and focused on our highest-return opportunities to drive greater cash flow, cover the dividend, and increase the earnings potential of our business in the near and longer term," Woods said.
In an effort to help fight climate change, the company also announced on Monday it will invest $3 billion in carbon capture and other emissions-cutting technology by creating a new business called Exxon Mobil Low Carbon Solutions.
With a $197.16 billion market cap, shares of Exxon Mobil were up 3.65% on Tuesday morning at $46.56. While the stock is up nearly 13% year to date, GuruFocus data shows it fell over 40% in 2020.
Disclosure: No positions.
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This article first appeared on GuruFocus.