ExxonMobil and Chevron To Report Earnings Amid Weaker Crude Oil Prices
ExxonMobil and Chevron To Report Earnings Amid Weaker Crude Oil Prices
Both companies saw their stock prices lag behind the broader market since their last earnings reports
- ExxonMobil and Chevron are set to report earnings tomorrow.
- Analysts expect Exxon and Chevron to post earnings per share of $1.88 and $2.64, respectively.
- A drop in crude oil prices likely affected the producers’ bottom lines.
The start of November marks a big day for oil producers’ earnings, with tomorrow ExxonMobil (XOM) and Chevron (CVX) scheduled to report tomorrow on quarterly fiscal results before the market open.
ExxonMobil and Chevron saw their stock prices lag behind the broader market since they last reported earnings, with XOM up about 1% since Friday, Aug. 2, and Chevron down nearly 2%.
Crude oil futures (/CL) declined about 15% through the July to September reporting period, and prices recently surrendered early gains from October. Natural gas futures (/NG), meanwhile, are about 5% higher through the same period.
What analysts expect from ExxonMobil and Chevron
Analysts anticipate ExxonMobil will report earnings per share (EPS) of $1.88, which would be down from Q3 ’23’s EPS of $2.27. Chevron is expected to report EPS of $2.64, representing a decline from $3.05 per share.
Revenue expectations are slightly better for ExxonMobil. Analysts expect XOM to post revenue of $94 billion, up from $90.76 billion in Q3 ’23. Chevron is expected to post revenue of $49.50 billion vs. $54.08 billion over the same period.
Investors want to see more production gains from ExxonMobil after the oil giant reported upstream total net production growth of 15%, stemming from gains in its Guyana and heritage Permian segments. XOM completed its acquisition of Pioneer Natural Resources earlier this year, bolstering its production capacity.
Meanwhile, Chevron is under more pressure to deliver from investors amid a decline in the stock price setbacks in Kazakhstan and Australia have eaten into profit margins. The ongoing battle with ExxonMobil over the purchase of Hess (HES) remains a drag on the company’s growth story. The deal, which remains in arbitration, would unlock an oilfield in Guyana that is currently operated by ExxonMobil.
Chevron also faces a risk from a Trump administration, which could threaten its production in Venezuela. Former President Trump would likely cancel U.S. oil producers’ licenses to operate in the country run by Maduro. Analysts will likely press leadership on the deal during the earnings call.
Trading XOM and CVX on earnings
XOM currently holds an implied volatility rank (IVR) of 57.7, while CVX trades with a 75.6 IVR. The expected move for XOM is +/- 4.17 points, representing a 3.5% move in the stock price. The options market expects a move of +/- 6.06 points, or a 4.1% move in CVX. That said, traders looking to sell premium could find a little more bang for the buck trading CVX, given its higher relative expected move.
XOM is trading in the middle of its move from the September low to October high. That said, an iron condor represents a potential trade for investors expecting the stock price to remain near that mid-range.
CVX trades with a weaker technical structure, with prices remaining well below the Q2’24 pre-earnings level. Traders expecting further weakness from CVX may prefer to sell a call spread to express a neutral to bearish bias.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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