By Sheila Dang HOUSTON (Reuters) -Exxon Mobil signaled on Tuesday that sharply weaker oil refining results, asset impairments and lower oil prices would reduce its fourth-quarter earnings by about $1.75 billion from the prior quarter. The oil major also said in an SEC filing that the impairments would knock off about $600 million, mostly in […]
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Exxon Mobil signals oil refining results to hurt Q4 profits
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By Sheila Dang
HOUSTON (Reuters) -Exxon Mobil signaled on Tuesday that sharply weaker oil refining results, asset impairments and lower oil prices would reduce its fourth-quarter earnings by about $1.75 billion from the prior quarter.
The oil major also said in an SEC filing that the impairments would knock off about $600 million, mostly in the upstream business. The company’s filing did not specify a reason for the impairments.
Exxon is expected to post a profit of $1.76 a share in the quarter, down from $2.48 a share, in the same quarter last year, according to financial firm LSEG.
Exxon’s earnings snapshot signaled profits “well below consensus,” said Biraj Borkhataria, an oil analyst with RBC Capital Markets, in a note to investors. The forecast showed “significant headwinds” in refining, he added.
The company indicated oil refining margins would cut earnings by between $300 million and $700 million from the third-quarter level. It also signaled timing effects would lop off another $500 million to $900 million.
U.S. refiners had profit margins squeezed last year with weaker-than-expected demand for gasoline and diesel and greater production across the globe.
Exxon’s snapshot is closely watched for clues to how other oil majors will fare when they begin releasing results this month.
Oil prices declined about 6% in the quarter ended Dec. 31 from the prior three months, and down nearly 12% from a year-ago, as traders worried about global oil demand.
The drop was partially offset by higher U.S. prices for natural gas, which were up about 30% from the prior quarter.
The industry bellwether had posted $8.6 billion in earnings for the third quarter, and an adjusted profit of $9.96 billion in the year-ago fourth quarter.
The company will release final results on Jan. 31, the filing said.
(Reporting by Tanay Dhumal and Vallari Srivastava in Bengaluru and Sheila Dang in Houston; Editing by Devika Syamnath and David Gregorio)