Exxon Mobil Corp. and Chevron Corp. posted the worst losses in a generation after the pandemic and a global crude glut combined to batter almost every part of their businesses.
Exxon’s $1.1 billion second-quarter loss was the deepest in the company’s modern history. A collapse in crude prices bled the company’s production division while Covid-19 lockdowns lowered demand for everything from jet fuel to plastic wrap, hobbling the company’s refining and chemical units.
Chevron recorded its weakest performance in at least three decades and warned that the global pandemic wreaking havoc upon energy markets may continue to drag on earnings. The explorer plans to curtail the equivalent of 5% of its worldwide output during the current quarter and backtracked on plans to massively ramp up production from its prized Permian Basin holdings.
Oil has become the poorest-performing sector of U.S. equity markets as a confluence of economic, political and structural threats coalesce to imperil the very foundations of the petroleum industry. Sweeping layoffs, budget cuts and project cancellations haven’t been enough to arrest the industry’s decline as fleeing investors made energy the worst investment in the S&P 500 Index this year.
Without the massive trading operations that shielded European oil explorers such as Royal Dutch Shell Plc and Total SE from losses, Chevron was exposed to the full force of this year’s oil price rout. Notably, Exxon’s nascent trading foray “experienced unfavorable mark-to-market derivative impacts,” the company said.
Exxon generated zero cash from operating activities during the quarter, according to a statement on Friday.
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General Electric Co. posted a roughly $2 billion quarterly loss as revenue tumbled 24%, hurt by a steep decline in a jet-engine business that has been hobbled by the coronavirus pandemic.
The aviation business, once a profit engine for GE, swung to a loss in the June quarter as both revenue and orders plunged. The unit produces engines for Boeing Co. and Airbus SE planes but has had to cut production and jobs as airlines delay orders. On Wednesday, Boeing said it would cut further production of commercial jets.
GE reported it burned through less cash in the June quarter than it had previously warned. The company reported adjusted negative cash flow from industrial operations of $2.1 billion, compared with its projection of negative $3.5 billion to $4.5 billion in May. Analysts were expecting negative cash flow of $3.29 billion, according to FactSet.
"We're working through a still-difficult Covid-19 environment," said CEO Larry Culp, adding that he still expected a prolonged recovery for the commercial-aviation business. "Still, based on what we see today and the actions we've taken, sequential improvement in earnings and cash in the second half of the year is achievable."
CALGARY — Husky Energy Inc. swung to a $304-million net loss in the second quarter as revenues plunged nearly 55 per cent.
The Calgary-based oil producer says it lost 31 cents per diluted share for the three months ended June 30, compared with net income of 36 cents per share or $370 million a year earlier.
Revenues were $2.38 billion, down from $5.24 billion in the second quarter of 2019.
Husky Energy was expected to lose 39 cents per share on $2.73 billion of revenues, according to financial markets data firm Refinitiv.
Funds from operations were $18 million or two cents per share, down from $802 million or 80 cents per share a year earlier while capital expenditures were $310 million, including $63 million in Superior Refinery rebuild capital.
Total equivalent production fell 7.8 per cent to 247,000 barrels of oil equivalent per day, from $268,000 a year earlier.
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