Exxon Mobil has forecasted a significant decline in its fourth-quarter earnings, attributing the downturn to lower refining margins and broader market challenges. The company's shares fell as analysts revised their earnings estimates downward.
Exxon Mobil, one of the world's leading oil and gas companies, has issued a warning about its expected fourth-quarter earnings, signaling a challenging period ahead. The company anticipates a decline in earnings by approximately $1.75 billion from the previous quarter, primarily due to a squeeze on refining margins and weaker performance across its operations. This news led to a nearly 2% drop in Exxon's shares during early trading on Wednesday, reflecting investor concerns over the company's profitability in the face of market volatility and pricing pressures.
The oil giant's earnings snapshot revealed that the fourth quarter would be marked by lower refining profits, a trend that has been affecting the industry as a whole. Exxon's refining capacity, which stands at 4.5 million barrels of oil per day, has been impacted by the opening of new plants globally, contributing to a surplus in refining capacity and subsequently lower margins. The company also faced challenges from reduced demand for fuels and excess supply from new refineries in Asia and Africa, which came online in 2024.
Exxon's third-quarter profits had already shown a 5% decline compared to the same period in the previous year, while its competitor Chevron experienced a more significant drop of 21%. The fourth-quarter outlook is even more concerning, with Exxon expecting to post a profit of $1.76 per share, down from $2.48 per share in the same quarter of the previous year. This forecast is well below consensus estimates, prompting analysts to revise their earnings projections downward.
Analysts from Mizuho and UBS have weighed in on Exxon's situation. Mizuho's Nitin Kumar noted that weaknesses in upstream liquids pricing, energy products margins, and chemicals margins are weighing on results. He adjusted his fourth-quarter earnings-per-share estimate to $1.55, maintaining a Neutral rating on Exxon stock with a price target of $134. UBS, on the other hand, anticipates fourth-quarter earnings per share of $1.79 and maintains a Buy rating with a price target of $147, suggesting that factors like growing upstream volumes and cost reduction efforts could provide some upside.
Despite the immediate challenges, Exxon remains focused on long-term growth. The company plans to increase its production by 18% by 2030, aiming for 5.4 million barrels daily, driven by higher output in the Permian Basin and Guyana. This strategic focus on increasing production could help mitigate the impact of current market conditions and position Exxon for future growth.
As Exxon navigates these turbulent waters, investors and analysts will be closely watching the company's final earnings report on January 31, 2025, for further insights into its performance and strategic direction.
Robinhood Markets, Inc. has seen its stock price surge to a new 52-week high, driven by positive upgrades and a favorable market environment. The company's performance in 2024 and its position in the penny stock market have also contributed to its recent success.
Hino Motors, a subsidiary of Toyota, faces criminal charges in the U.S. for selling over 105,000 non-compliant diesel engines, marking a significant scandal in the automotive industry.
Instagram, owned by Meta, experienced a significant outage in the US on January 15, 2025, which was largely resolved by the afternoon, as reported by Downdetector.
BlackRock Inc. reported a record $11.6 trillion in assets under management in Q4 2024, driven by strong market performance and strategic acquisitions, leading to a rise in its stock price.
General Motors has signed a multi-billion dollar agreement with Vianode to secure synthetic graphite for its electric vehicle batteries, aiming to reduce reliance on China and enhance EV production.
The Bank of New York Mellon Corporation (BNY) reported a robust Q4 2024, with earnings and revenue surpassing expectations, leading to a significant rise in its stock price.
JPMorgan Chase reported a record annual profit and a significant Q4 earnings beat, driven by a surge in investment banking fees and trading revenue, surpassing Wall Street expectations.
Meta Platforms Inc. plans to cut approximately 5% of its workforce, focusing on low performers, as part of its ongoing efficiency drive. CEO Mark Zuckerberg announced the move in an internal memo, signaling an 'intense year' ahead with a focus on AI, smart glasses, and social media innovation.
Boeing's stock experienced a decline following a significant drop in aircraft deliveries in 2024, marking the lowest delivery numbers since the onset of the COVID-19 pandemic. The company faced challenges including a labor strike, production issues, and increased competition from Airbus.