Exxon Profit Shrinks on Declining Refining Margins

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

Oct. 31 (Bloomberg) -- Bloomberg’s Alix Steel reports that Exxon Mobil’s third-quarter profit fell as U.S. profit margins from oil refining oil declined 43 percent. She speaks on Bloomberg Television’s “In The Loop.”

About $112 billion in revenue.

Both of those were lower, however, year on year and quarter on quarter.

We are still looking at declining profit, even though it beat estimates.

Part of the story was a eager refining margin.

They have three areas of their business.

Production, chemicals, and refining.

Refining was a weak spot.

Overall, exxon is dealing with an issue along with other big oil industries.

It is spending a lot of money and getting very little out.

Production is up about 1.5%, but that is rough considering the amount of money they're putting into it, like $10 billion a quarter.

They're forced to drill more and more.

Overall, exxon has been about 70% more sense 2008 -- more since 2008, while cash flow has fallen and production is essentially flat.

There is the crux of the issue.

Exxon can still generate billions in sales.

What is a making per barrel of oil?

Overall, made $17.54 a barrel , however, that peaked in 2008. it was making upwards of $23, $24 a barrel.

It is not making as much as it used to.

But there are several projects that will come online in the next two years -- few years.

They will have more to sell and less money to put in an order to produce it.

We know oil prices have been falling.

What does that do to exxon?

It is a double-edged sword.

On the one hand, the stock tends to outperform the risk your oil stock when oil prices are lower.

It is considered a safety play.

The downside is, the falling oil prices will compress those earnings.

We have seen wti fall quickly over the last few weeks.

Oppenheimer predicts a 20% drop in oil prices would reduce earnings by about $9 billion.

Thank you very much, alix steel, with the latest on exxon.

Moving from exxon's earnings to facebook's third quarter earnings out yesterday after the close, exceeding estimates.

The stock topped 18% in the after-hours trading.

Things soon turning sour thereafter, comment on the earnings call it raising the entire -- entirety of those gains.

Joining me now is julie hyman.

Lots of ups and downs for facebook after the close.

What did investors here -- hear?

Teenagers.

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change