ExxonMobil warns on Q3 earnings, chems margins expected flat to weaker

LONDON (ICIS)–ExxonMobil has warned on potentially weaker chemicals margins for the third quarter of the year as the US-headquartered major absorbs heavy drops in oil and gas pricing.

Third-quarter chemicals earnings are projected to be flat compared to second-quarter earnings of $0.2bn. A flat to $100m negative impact from chemical margins, would put them well down year on year.

In an SEC filing late on Tuesday, the company warned that drops in liquids prices in the third quarter are expected to see oil earnings slashed by $0.4-0.7bn, and lower gas prices to have a $0.1bn to minus $0.1bn impact. Upstream earnings stood at $3.3bn in the second quarter.

The movement in downstream margins in the third quarter of 2019 are expected to add $0.1bn-0.3bn to profits for the period compared to $0.5bn announced for the quarter, in the second quarter, the company said.

Second-quarter chemical results for the multinational major plummeted by 79% year on year, falling to $188m globally from Q2 2018 results of $890m.

The $702m drop included $440m lost in margins, $120m from downtime or maintenance, $30m on project-related expenses and $100m other losses.

This continues the trend of weaker chemicals earnings for the company, that were posted in the third quarter 2018, which saw earnings sag to $713m, from $890m in the second quarter, and record a 35% year-on-year fall from Q3 2017 earnings of $1.092bn.

This announcement comes in the wake of Shell announcing flat margins between the second and third quarter for steam cracker and chemical intermediates.

ExxonMobil is expected to announce its financial results for the third quarter 2019 on 31 October.

(Picture source: Source: Richard Drew/AP/Shutterstock)