Exxon Mobil Posts $20.1B Loss In 4Q; Street Says Hold

Exxon Mobil reported a $20.1 billion loss in the fourth quarter versus a profit of 5.7 billion during the same period last year. Shares rose 1.6% and closed at $45.63 on Feb. 2, as the oil giant’s 4Q earnings per share outperformed analysts’ expectations.

Exxon’s 4Q EPS of $0.03 came in ahead of analysts’ estimates of $0.01. The oil giant’s revenues dropped 44.3% year-on-year to $46.5 billion. Analysts had been looking for $48.7 billion in sales.

Exxon’s (XOM) capex for FY20 fell by $9.8 billion to $21.4 billion year-on-year. Darren W. Woods, CEO of Exxon Mobil commented, “The past year presented the most challenging market conditions ExxonMobil has ever experienced. While the effects of the pandemic significantly impacted our 2020 results, our previously executed strategic initiatives and reorganizations enabled us to respond decisively to permanently improve our cost structure, drive greater efficiencies across our businesses, and emerge a stronger company.”

“These improvements are expected to deliver structural expense savings of $6 billion per year by 2023, relative to 2019.” Woods added.

Furthermore, Exxon Mobil expects structural operating expenses to be cut by $3 billion by 2023, resulting in total annual reductions in structural operating expenses of $6 billion as compared to 2019. Exxon also announced a new business, ExxonMobil Low Carbon Solutions, which seeks to commercialize its low carbon technology business portfolio. (See Exxon Mobil stock analysis on TipRanks)

Raymond James analyst Justin Jenkins reiterated a Sell rating on the stock following the 4Q results. Jenkins said, “Exxon’s 4Q results were near expectations. The 2021 outlook calls for covering capex and the dividend at $50 Brent (our prior model is ~$5+/Bbl [barrel of oil] higher than this, so we’ll need to see details). Additionally, the company is outlining further cost cuts ($3 billion more by 2023) and flexibility in its 2021-2025 capital program.”

The rest of the Street has a Hold consensus rating on the stock. That’s based on 6 analysts recommending a Buy, 6 analysts suggesting a Hold, and 3 analysts recommending a Sell. The average analyst price target of $51.75 implies 13.4% upside potential to current levels.

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