Exxon Mobil Corporation (XOM) delivered some sobering news to investors Thursday, warning that shifting oil prices are about to put a serious dent in its fourth-quarter performance. The energy giant expects its upstream results to take a hit of $800 million to $1.2 billion compared to the third quarter.
The Breakdown by Segment
Natural gas prices are adding to the pain, with upstream results facing another $300 million headwind to potentially a modest $100 million benefit during the same period. So not exactly helping the situation.
There's a silver lining, though. Changes in industry margins should lift Energy Products earnings by $300 million to $700 million over the same timeframe, providing some offset to the upstream weakness.
The Chemical Products segment faces its own challenges, with industry margin changes expected to shave off $200 million to $400 million from earnings. Specialty Products, meanwhile, could see anywhere from flat performance to a $200 million increase in the fourth quarter.
Exxon Mobil also flagged timing effects as a factor, projecting an impact on upstream earnings ranging from negative $300 million to positive $100 million. Energy Products could benefit more substantially from timing, with a potential boost of $100 million to $500 million.
Scheduled maintenance is another headwind, expected to weigh on upstream results by up to $200 million, while Energy Products, Chemical Products, and Specialty Products could see impacts ranging from a $100 million drag to a $100 million benefit.
Wall Street analysts are expecting fourth-quarter adjusted earnings per share of $1.67 on revenue of $81.43 billion, according to market data.
Looking Ahead to 2030
Despite the near-term challenges, Exxon updated its corporate plan through 2030 with some impressive projections. The company forecasts $5 billion in additional earnings and cash flow growth without any increase in capital spending—essentially doing more with what they've already got.
Earnings growth is projected to average 13% annually through 2030, with double-digit cash flow growth. Per-share growth should be even higher thanks to ongoing share repurchases that shrink the denominator.
The company also increased its cumulative structural cost savings plan by $2 billion to reach $20 billion total. And in what might be the most surprising bit of news, Exxon says it expects to hit all its 2030 corporate greenhouse gas emissions intensity targets four years early, in 2026.
Exxon Mobil shares edged up 0.09% to $118.60 during premarket trading Thursday.