US oil giants Exxon Mobil (XOM.US) and Chevron (CVX.US) reported their financial results for Q4 2023. Overall, the companies' revenue-level results performed mixed. In this aspect, earnings alone (relative to analysts' expectations) fared much better.
Exxon Mobil (XOM.US)
- Earnings per share $2.48 (estimate $2.21)
- Sales revenue: $84.34 billion (estimate: $85.23 billion)
Comments:
- The company plans to start lithium production in 2027 and aims to supply lithium to 1 million electric vehicles per year by 2030
- We forecast lower volumes in Q1 due to the lack of a favourable allowance impact in Q4, partially offset by accelerated development work in the mining segment.
- Q4 free cash flow fell 35% to USD 7.97 billion, but exceeded FactSet consensus of USD 7.77 billion.
Exxon Mobil shares (XOM.US, D1 interval)
The company's shares are currently trading within the support set by the 23.6% Fibo measure of the downward wave initiated in September 2023. Before the Wall Street open, the company's shares are currently losing 0.63%.Source: xStation
Chevron (CVX.US)
The second-largest oil producer in the US beat expectations for net profit, but revenue disappointed with a 40% year-on-year decline. Shares traded flat after results
- Revenue:$47.18bn vs $51.2bn forecasts
- Upstream: US$1.59bn vs US$4.55bn forecasts
- Downstream: $1.15bn vs $1.03bn forecasts
- Earnings per share (EPS): USD 3.45 vs USD 3.22 forecasts
- Full-year 2023 EPS of US$13.13 vs US$18.83 in 2022 (US$36.54bn)
- The company decided to raise its quarterly dividend by 7.9% to US$1.63 per share, thanks to higher oil and gas production.
Comments:
- 2023 saw significantly lower refining profits (versus record 2022) and higher costs. Despite delayed expansion and lower y/y profit, Chevron returned an all-time record $26.3bn to investors in 2023 in the form of share buybacks and dividends
- Q4 2023 profits down 18% vs 2022 (to $6.45bn) but company positive on higher production volumes related to oil acquisitions and shale gas production (Permian Basin volumes up 10% y/y although lower prices and f/x impact reduced profits, despite higher production)
- Return on capital employed (ROIC), a measure of business performance, fell to 5.1% in the final quarter of 2023 from 14.2% in Q3 illustrating the seasonal increase in oil and gas prices as a significant factor impacting Chevron's business
- Additionally, production delays and maintenance work at a major oil expansion project in Kazakhstan has led the company to admit that it is not utilising 100% of its potential. Production in Kazakhstan is expected to fall by 50,000 barrels per day this year due to maintenance work.
- Acquisitions and higher investment in the US pushed capital spending up 32% to US$15.8bn.
Chevron shares (CVX.US, D1 interval)
On the daily chart of Chevron shares we see a formation resembling a head and shoulders (RGR), a potential breakout above 157 USD per share could negate the downward scenario that remains underlying in the medium term. On the other hand, a fall below USD 136 could open the stock up to USD 100, a global recession would probably be necessary for this, projecting oil prices. Source: xStation5
