Chevron (CVX), Exxon Mobil (XOM) Shares Tank on Disappointing Earnings

Chevron, Exxon Mobil

Chevron Corporation (NYSE:CVX) and Exxon Mobil reported disappointing financial results for the second quarter. As a result, the stock prices of both companies declined nearly 5% on Friday.

The stock price of Chevron dropped 4.89% to $88.48 per share while Exxon Mobil’s stock value tanked 4.48% to 79.29 per share.

The decline in the stock prices of Chevron and Exxon Mobil negatively impacted the Dow Jones Industrial Average, which ended the trading down by 0.32% to 17,689.86 points today.

Exxon Mobil is the largest publicly traded oil and gas company with approximately $347 market capitalization. Chevron Corporation is the second largest with $175 billion market capitalization.

Chevron financial results

Chevron reported that its earnings declined from $5.7 billion or $2.98 per share to $571 million or $0.30 per share in the second quarter.

According to the company, the decline included impairments of $1.96 billion and other charges of approximately $670 million related to project suspensions and adverse tax effects.

Chevron posted sales and operating revenues of $37 billion, down from $56 billion in the same period a year earlier.

In a statement, Chevron Chairman and CEO John Watson said, “Second quarter financial results were weak, reflecting a crude price decline of nearly 50 percent from a year ago. Our Upstream businesses were particularly hard hit, as lower prices reduced revenues and triggered impairments and other charges.”

Exxon Mobil financial results

On the other hand, Exxon Mobil delivered earnings of $4.2 billion or $1.00 per share for the second quarter, down by 52% from $8.79 billion or $2.05 per share in the same period last year.

Bloomberg noted that Exxon Mobil’s current quarterly financial performance is the worst since 2009 due the declining oil prices.

Exxon Mobil Chairman and CEO Rex Tillerson said, “Our quarterly results reflect the disparate impacts of the current commodity price environment, but also demonstrate the strength of our sound operations, superior project execution capabilities, as well as continued discipline in capital and expense management.”

During the quarter, the company returned $4.1 billion capital to shareholders including $1 billion in stock buyback. Its dividend per share increased 5.8% to $0.73 per share.

In an interview with Bloomberg, Robbert van Batenburg, a market strategist at Societe General commented, “The buyback program is a big shocker. The energy space has been traditionally one of the biggest sectors buying back stock.”