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Jun 30, 2020
ExxonMobil Q2 2020 Earnings Report
ExxonMobil's financial results were significantly impacted by the global pandemic and oversupply conditions, leading to lower prices, margins, and sales volumes.
Key Takeaways
ExxonMobil reported a second quarter 2020 loss of $1.1 billion, or $0.26 per share assuming dilution, driven by the global pandemic and oversupply conditions. The results included a positive noncash inventory valuation adjustment of $1.9 billion. Capital and exploration expenditures were $5.3 billion. Oil-equivalent production was 3.6 million barrels per day, down 7 percent from the second quarter of 2019.
Global oversupply and COVID-related demand impacts drove second quarter loss of $1.1 billion.
Company is on track to meet or exceed 2020 capital and cash operating spend reduction targets.
ExxonMobil supported COVID-19 response by reconfiguring operations to increase production of hand sanitizer and raw materials for protective equipment.
Oil-equivalent production was 3.6 million barrels per day, down 7 percent from the second quarter of 2019.
ExxonMobil
ExxonMobil
Forward Guidance
ExxonMobil has increased debt to a level they feel is appropriate to provide liquidity, given market uncertainties. Based on current projections, they do not plan to take on any additional debt and have identified significant potential for additional reductions.
Positive Outlook
- The company is on track to meet or exceed its cost-reduction targets for 2020.
- ExxonMobil is continuing work to improve efficiency by leveraging recent reorganizations.
- The company will continue to acquire shares to offset dilution in conjunction with its benefit plans and programs.
- The company demonstrated production capacity of 120,000 gross barrels of oil per day at the Liza Phase 1 development offshore Guyana.
- ExxonMobil made significant progress on its previously announced capital and cash operating spend reductions.
Challenges Ahead
- The global pandemic and oversupply conditions significantly impacted the second quarter financial results with lower prices, margins, and sales volumes.
- Industry fuels margins were considerably lower than in the first quarter, reflecting the impacts of COVID‑19 on demand for gasoline and jet fuel.
- Chemical sales volumes were lower than first quarter driven by the impacts of COVID-19 on global demand.
- Operations were impacted by logistical restrictions resulting from COVID-19.
- Average refinery utilization was down significantly from first quarter on lower demand, as the company spared about 30 percent of its refining capacity.