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Exxon and Chevron earnings arrive Friday, Oct. 30. Exxon’s call starts at 8:30 a.m. Central, and Chevron’s follows at 11 a.m. Eastern. The surprise is that Exxon has already shown its hand. A filing with the SEC says higher refining margins add about $4.5 billion to earnings compared with the second quarter, while lower oil prices take back $1.3 billion.
What Exxon has already told investors
The same filing sets the baseline. Exxon’s adjusted second-quarter earnings were $14.7 billion, led by $9.2 billion from upstream and $4.1 billion from energy products. For the third quarter it lists refining and fuels margins as the big plus, specialty products as a smaller one at $0.5 billion, and chemicals as a drag of $0.6 billion. Gas prices add $0.3 billion. There’s also a $2.5 billion negative from timing effects, which Exxon reports separately. Exxon also said it saw no volume losses tied to Middle East events.
Exxon is careful to say these are limited estimates, not an earnings forecast. Analysts have still run the math. Stocktwits reports that Goldman’s Neil Mehta thinks the filing implies earnings near $4.10 a share against a FactSet consensus around $3.87, with Goldman’s own estimate at $4.33. A year ago Exxon earned $1.88.
What Chevron reported in July
Chevron’s second-quarter release showed adjusted earnings of $12.0 billion, or $6.06 a share, and cash flow from operations of $22.6 billion. Free cash flow was $18.1 billion. Production averaged 4,070 thousand barrels of oil equivalent a day, up 20% from a year earlier, helped by the Hess deal. Chevron bought back $3.1 billion of stock, paid a $1.78 quarterly dividend and spent $4.5 billion on capital projects. It also said the Hess merger has reached $1.5 billion of annual run-rate synergies.
What to watch in Exxon and Chevron earnings
How big is the refining windfall?
That’s the headline for Exxon and Chevron earnings. A $4.5 billion swing from margins alone is huge, and the filing says Middle East disruptions cost nothing in volume this time. Chevron’s refining and chemicals results will show whether the margin jump hit the whole sector. Exxon’s number is mostly known. Chevron’s is the unknown, which is why its call may carry more weight.
Do lower oil prices still hurt?
For the quarter they do. Exxon’s own estimate has liquids prices costing $1.3 billion versus the second quarter. Prices have jumped since then, and Brent topped $110 after a Saudi drone strike, as our crude price story reported. That move came after the quarter closed on Sept. 30, so it should show up later.
Can Chevron keep the cash flowing?
Last quarter’s $18.1 billion of free cash flow paid for the dividend and the buybacks with plenty left over. Investors will look for the same pace, and for any change to the roughly $3.1 billion quarterly repurchase rate.
Is Chevron’s growth holding up?
A 20% jump in production came largely from Hess. For Exxon and Chevron earnings, the question is how much organic growth is left once that boost stops lapping.
Editor’s take
For Exxon and Chevron earnings, the refining boost is the story, but it’s already known for Exxon. That means the stock reaction depends on what comes next: guidance on capital spending, buybacks and how long margins stay fat. Chevron’s numbers are the real unknown. A result in line with Exxon’s filing would be a relief, while a miss on refining would raise questions about why one company benefited more than the other.
The wider market has been jumpy too, as our weekly market recap shows, so a big energy move on Friday could swing the major indexes.
