Oil majors Exxon Mobil (XOM) and Chevron (CVX) are scheduled to announce Q3 earnings results on Friday, before market open, and investors will watch for updates on production plans and cost controls amid ongoing volatility in crude oil prices and legal disputes.
For Exxon, the consensus EPS estimate is $1.83 (-4.7% Y/Y) on revenue of $83.6B (-7.1% Y/Y). While Chevron is expected to post a bigger drop in profit, with analysts estimating EPS of $1.71 (-31.9% Y/Y) on revenue of $47.42B (-6.4% Y/Y).
Chevron (NYSE:CVX) has forecast Q3 production of 450,000-500,000 boe/day from the newly acquired Hess assets, including some downtime; the company’s total global production in Q2 totaled 3.4 million boe/day.
It also anticipates a Q3 loss of $200 million to $400 million related to its recently completed acquisition of Hess.
Exxon, meanwhile, expects changes in crude oil prices to boost its Q3 earnings by as much as $300 million compared with Q2. The company also said restructuring costs could negatively affect overall earnings by $400 million to $600 million.
The company said refining margins rebounded in the quarter, adding $300 million to $700 million to earnings, and a smaller gain of $100 million to $300 million from higher margins in its chemicals division.
Over the last 2 years, CVX has beaten EPS estimates 63% of the time and revenue estimates 50% of the time. In contrast, XOM has beaten EPS estimates 75% of the time and surpassed revenue estimates 50% of the time.
SA Investing Group leader Envision Research rates CVX as a Strong Buy and XOM as a Buy. According to the firm, Chevron’s current valuation is attractive, and a colder-than-average winter is expected to boost U.S. natural gas demand, supporting higher prices and benefiting CVX’s profits.
For ExxonMobil, Envision notes that recent developments, such as trade conflicts and potential OPEC production increases, could weigh on oil prices and XOM’s near-term performance.