ExxonMobil is set to post its third straight loss in its upstream business this year, as lower oil demand continues to hurt oil companies’ profitability.
In an SEC filing on Thursday, Exxon provided a Q3 earnings considerations update of its expectations for the third-quarter results relative to the second quarter. The U.S. supermajor is reporting Q3 financials on October 30.
Exxon’s upstream business, which booked a loss of US$1.7 billion in Q2, will see its exploration and production division get a boost of between US$1.4 billion and US$1.8 billion in Q3 compared to Q2, thanks to higher crude oil and liquids prices. However, lower natural gas prices are likely to hurt the upstream business with up to US$500 million, Exxon’s filing showed.
In the downstream – which saw US$1 billion in Q2 earnings – weaker refining margins are set to weigh on the Q3 results with between US$200 million and US$600 million. Changes in the North American crude logistics differentials are also expected to weigh on the downstream with an additional US$200 million.
The Q3 earnings considerations update points to Exxon booking a loss in the quarter of around US$0.30 per share, according to analysts at Tudor, Pickering, Holt & Co, quoted by Reuters.
The Wall Street Journal analyst consensus points to Exxon posting a loss of US$0.08 per share in the third quarter.
For the second quarter, Exxon reported at the end of July its second consecutive quarterly loss, which was the worst loss for the U.S. supermajor in its modern history.
Exxon booked a loss of US$1.1 billion for the second quarter due to the global oversupply and COVID-related demand impacts. This compares with earnings of US$3.1 billion for the same period last year.
Exxon’s total revenues more than halved to US$32.6 billion for Q2 2020 from US$69.1 billion a year earlier, highlighting the pain that oil companies suffered during one of the worst quarters for the industry ever.