- Earnings were taken badly by the market because of the size of the miss. However, earnings are always difficult to predict in this sector.
- Production was down due to problems in some countries but next quarter should better.
- The dividend is not at risk. Exxon needs better refining margins and higher crude oil prices to post better earnings in forthcoming quarters.
Upstream, for me, didn't deliver as expected, only bringing in $294 million from the $1.7 billion earnings take. Analysts were hoping that the second quarter would mark the bottom of Exxon's earnings slump but it wasn't to be. The $1.7 billion net income figure came in $100 million shy of last quarter number which means Exxon's downward earnings spiral hasn't come to an end yet.
Crude oil prices averaged over $46 a barrel in the second quarter and it was expected that this in turn would lead to much higher upstream earnings, but we didn't get the boost we were expecting.