Feb 5, 2019

Exxon Mobil, Chevron, Shell, BP Post Solid Earnings

By Eddie Gunn

The big boys of the energy industry - Exxon Mobil Corp., Royal Dutch Shell, Chevron Corp., and BP Plc – have posted stellar earnings by smashing analysts’ consensus estimates which will ease investors’ concerns regarding sustainability of dividends and buybacks in a weak oil price environment.

Despite the weakness in crude prices seen at the end of last year, the oil super-majors generated strong levels of cash flows by reigning in expenditures and delivering solid returns from ongoing projects. The four companies have been rewarded by Mr. Market.

Now, the companies need to demonstrate that they can continue going this way in 2019 which could be a tough year for oil prices. The Chief Financial Officers of Shell and BP have expressed confidence in their companies’ ability to do just that while Chevron has promised a $25 billion buyback program. Exxon is increasing spending but is also targeting more asset sales as it grows its oil production and refining businesses.