Exxon Mobil, Phillips 66 shine as energy majors smash Q2 expectations: Earnings Scorecard

Energy stocks were in the spotlight last week as oil & gas majors Exxon Mobil (XOM), Chevron (CVX) and Phillips 66 (PSX) reported their latest quarterly numbers.

The week saw nine S&P 500 (SP500) energy names announcing their earnings, with seven of them exceeding Wall Street bottom-line estimates. On the top-line, five companies managed to post higher sales, while four missed out.

The S&P 500 energy index was up 4% YTD but around 3% down this week, while its associated ETF (NYSEARCA:XLE) was up 4% YTD and down nearly 5% for the week.

S&P 500 2Q24 Earnings Update: Over 60% of S&P 500 companies have released their quarterly updates so far, with 75% topping earnings and 56% beating revenue estimates, JPMorgan said in its analysis. Roughly 48% have had double beats and 28% of companies have had revenue misses but sales beats, the highest in over a year.

Performance (Beats/Misses):

Here is a quick glance at the S&P 500 energy results that released in the trading week ended August 2:

Exxon Mobil (XOM) delivered its second highest Q2 earnings of the past decade and the highest quarterly oil production since the Exxon and Mobil merger. Net income surged 17.2% Y/Y to $9.24B on 12% higher revenues, both beating analyst projections for the quarter. Exxon (XOM) said the Pioneer merger contributed $500M to earnings in the first two months post-closing with record production. Seeking Alpha analyst Jonathan Weber said, “Exxon Mobil surprised to the upside with a double beat versus expectation, while operating cash flows, adjusted for working capital, were strong as well.”

Chevron (CVX) earnings fell short of Wall Street estimates, due to lower refining margins and natural gas prices. Although net income fell to $4.43B and missed projections, revenue of $51.18B (+4.7% Y/Y) comfortably beat analyst expectations. Seeking Alpha analyst Power Hedge said, “Oil prices were higher this year than in the prior-year quarter, which benefited Chevron’s earnings through higher liquids realizations. Natural gas prices, as expected, were a net drag.”

Phillips 66 (PSX) also delivered a double beat, led by strength in its midstream unit. However, CFO Kevin Mitchell noted that refining margins are “weaker than we’ve seen in a little while” giving the company the opportunity to perform some discretionary maintenance. “PSX’s diverse business makeup through midstream, retail and chemical segments have shown capable to create an earnings floor for the company,” said Seeking Alpha analyst Ronald Ferrie.

ConocoPhillips (COP) topped earnings estimates for the second quarter, driven by record production and oil prices. Q2 net income advanced slightly to $2.33B, or $1.98/share, from $2.23B, or $1.84/share, in the year-earlier period, helped by higher average realized prices.

Other energy names that delivered earning beats included: Hess (HES), APA Corp. (APA), Targa Resources (TRGP) and EOG Resources (EOG).

Week ahead in earnings: Devon Energy (DVN), Diamondback Energy (FANG), Marathon Oil (MRO), Marathon Petroleum (MPC), Occidental Petroleum (OXY) and ONEOK (OKE) are the S&P 500 energy stocks due to report next week.