Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

Darren Woods, chairman and CEO of Exxon Mobil, speaks at the New York Stock Exchange on March 1, 2017.

Brendan McDermid/Reuters

Exxon Mobil Corp on Friday reported a $1.1 billion second-quarter loss on sharply lower energy demand and prices from the COVID-19 pandemic, and confirmed plans to make deeper spending cuts.

It was Exxon’s first back-to-back quarterly loss in at least 36 years, but was small in comparison to rivals who took giant charges last quarter. The top U.S. oil producer took no asset write-downs during the quarter, and got a 44-cent-a-share boost to earnings by increasing the value of inventories.

Chevron Corp, Total, Royal Dutch Shell , and Eni each wrote down their oil and gas properties last quarter by several billion dollars apiece, while BP signaled an up to $17.5 billion hit.

Story continues below advertisement

Exxon slashed capital spending 30% this year to around $23 billion, and Senior Vice President Neil Chapman said it expects to spend less than $19 billion in next year. That would be the lowest spending for the company since at least 2005.

It plans both capital and operating expense cuts to defend its dividend, Chapman said on a call with analysts, adding that investors “come to view that dividend as a source of stability in their income.”

It will not take on more debt and sees spending cuts as short term “to manage the current situation,” Chapman said.

Prior to the pandemic, Chief Executive Darren Woods pursued an ambitious spending plan to boost oil output and turn around sagging profits on a bet that a growing global middle class would demand more of its products.

The plan to significantly raise production and boost cash by selling assets has faltered, leading Exxon to slash costs to preserve an 8% shareholder dividend.

Exxon has identified an “undertaking a comprehensive evaluation,” of its global businesses, it said, without providing details.

Exxon’s oil and gas production business fell to a loss and its refining unit was hit by lower demand and weaker prices.

Story continues below advertisement

The U.S. oil major reported a loss of $1.08 billion, or 26 cents per share, compared with a profit of $3.13 billion, or 73 cents per share, a year earlier. Excluding inventory adjustments, the loss would have been $3 billion, it said.

On that adjusted basis, its per share loss of 70 cents missed Wall Street’s estimate of 61 cents, according to data from Refinitiv.

Exxon’s oil and gas output fell 7% to 3.6 million barrels per day during the quarter as it curtailed production due to the oil price crash.

Rival Chevron on Friday reported an $8.3 billion loss on asset writedowns, plummeting fuel prices, and expenses tied to thousands of jobs cuts.

Exxon’s production business reported a nearly $1.7 billion loss on lower output prices, compared with a $3.3 billion gain last year. Refining generated a $976 million operating profit despite lower margins and volumes. The unit’s gain came from an about $3.5 billion boost from non-cash inventory revaluations and by reversing a prior quarter’s impairment.

Chemical operating profit was $467 million, up from $188 million last year, and was “resilient” in a tough environment, said analyst Biraj Borkhataria of RBC Europe Limited.

Story continues below advertisement

The company is running out of capacity to add debt “without jeopardizing the strength of its balance sheet,” said analyst Jennifer Rowland of Edward Jones. The losses call into question “how long Exxon can continue to fund its dividend if the macro environment doesn’t substantially improve.”

Shares closed up a fraction at $42.08.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies