Exxon Mobil warns traders it is heading towards a fourth straight quarterly reduction

Irving-based Exxon Mobil Corp., which is struggling to sustain a $15 billion-a-year dividend software, has indicated it incurred a fourth straight quarterly loss.

Exxon confirmed in a regulatory submitting that it would acquire a create-down of as much as $20 billion on its upstream property, a possibility to start with disclosed at the conclude of October. It also noted significantly smaller sized non-cash impairments associated to its refining business.

There had been some positives in Wednesday’s disclosure. Larger oil and fuel price ranges experienced an effect of up to $1 billion on upstream income compared with the 3rd quarter. The substances phase observed an earnings strengthen of as substantially as $400 million due to the fact of improved margins.

A fourth-quarter reduction would ensure Exxon’s challenges in covering equally dividends and money expenditures from operational dollars movement, and that it continues to be reliant on financial debt. The very last time the business produced adequate absolutely free income to deal with its payout was the third quarter of 2018, in accordance to knowledge compiled by Bloomberg.

Exxon is established to disclose its entire quarterly outcomes on Feb. 2 all through 1 of the most punishing periods in the company’s 150-12 months background.

Its inventory cratered to a 22-yr very low during 2020 amid a globally glut of oil and collapsing demand that gutted money movement, spurring common position cuts. Exxon shed its position in the Dow Jones Industrial Typical, warned it would incur the major produce-down of its contemporary record, and was assailed by activist investors looking for far better returns and far more local climate accountability.

Exxon, which has extensive prided itself on its many years-long file of yearly dividend raises, may perhaps have opened the doorway to switching system in late November, in accordance to Jason Gabelman, an analyst with Cowen & Co.

Whilst corporation executives touted Exxon’s “reliable and developing dividend” through an October convention contact, a Nov. 30 assertion saying produce-downs and paying out cuts only mentioned its commitment to a “reliable” payout, Gabelman explained in a notice to shoppers.

Joe Carroll and Kevin Crowley, Bloomberg News