Earnings came in at $1.7bn, down 59.4% from the level a year ago.
Revenues were down 22.2 % to $57.7bn. The results again showed the effects of the oil-price bust, which mean ExxonMobil must sell the oil it extracts from the ground at a lower price than during the year-ago period.
ExxonMobil also suffered much lower profits from refining, which processes crude oil into gasoline and other petroleum products.
Large inventories of refined fuels have hurt the business, which has sometimes lifted the company’s profits during the two-year slump in oil prices. Refining profits fell 45.2% to $825mn.
“While our financial results reflect a volatile industry environment, ExxonMobil remains focused on business fundamentals, cost discipline and advancing selective new investments across the value chain to extend our competitive advantage,” ExxonMobil chief executive Rex Tillerson said.
The company’s earnings translated into 41 cents per share, far below the 64-cent analyst estimate.
Shares fell 2.6% to $87.90 in pre-market trade.
Enbridge
Enbridge, Canada’s largest pipeline company, reported a slightly lower-than-expected quarterly profit yesterday as its liquids pipeline business was hit by a massive wildfire in Fort McMurray, Alberta.
The company said oil deliveries were 255,000 barrels per day (bpd), or 10%, lower than expected in May and June due to fire disruption, but volumes came back up by the end of last month and are expected to return to normal in the third quarter.
Several producers and pipeline operators halted work in the region for weeks, at one point cutting Canada’s crude output by more than a mn barrels a day.
All of Enbridge’s pipelines in and out of its Cheecham terminal were shut down.
Earnings from continuing operations attributable to the company’s shareholders fell to C$301mn ($229mn), or 33 Canadian cents per share, in the second quarter, from C$577mn, or 67 Canadian cents per share, a year earlier.
Excluding items, the company earned 50 Canadian cents per share, just missing the average analyst estimate of 51 Canadian cents, according to Thomson Reuters I/B/E/S.
Eni
Italy’s Eni has raised the target for the amount of oil and gas it expects to discover this year by 50%, helping to offset a surprise net loss in the second quarter as it took a hit from lower crude prices.
The company also said yesterday it expected output to grow by more than 5% next year as production starts at its long-delayed Kashagan project in Kazakhstan, as well as in Ghana and Egypt’s Zohr.
“I am very confident about the future,” Chief Executive Claudio Descalzi said in a conference call.
Eni said it made an adjusted net loss in the second quarter of €290mn ($324mn) versus a net profit of €505mn the previous year.
Analysts’ average forecast in a Thomson Reuters poll was for a profit of €59.6mn.
As well as suffering — like rivals — from lower oil prices, Eni was hit by a shutdown of production at a key site in Italy.
However, the company was upbeat about prospects, both for finding more hydrocarbons and increasing production.
It lifted its exploration target for this year by 50% to 600mn barrels of oil equivalent (boe).
Eni has one of the best success rates in the industry in finding new reserves at one of the lowest cost bases.
It has discovered around 2.4 times what it actually produces since 2008, compared with a rate of just 0.3 times for its rivals.
United Parcel Service
United Parcel Service reported a higher quarterly net profit yesterday that met analyst expectations as revenue grew across its business units, and the company reaffirmed its full-year earnings outlook despite global economic uncertainty.
Chief Executive David Abney told Reuters UPS is adding capacity to its network and will work more closely with retailers ahead of this year’s crucial holiday peak season.
The company had put in a solid a performance during the 2015 peak season after two years of struggling to handle holiday demand and the costs associated with it.
“We think it’s going to be a repeat of last year,” Abney said.”We just have more tools in our toolbox this year.”
Often seen as a bellwether of US economic activity, UPS revenue at its core US domestic package business rose 2.4% on the year to just over $9bn.
UPS said second-quarter margins at its more lucrative international package business were boosted by volume growth, strong pricing and improved network efficiency gains.
The package delivery company posted second-quarter net income of $1.27bn, or $1.43 per share, up more than 3% from $1.23bn, or $1.35 per share, a year earlier.
Chevron Corp
Chevron Corp, the second largest US-based oil producer, posted a second-quarter loss yesterday, its largest since 2001, due to the slump in crude prices and refining income.
While the adjusted results beat Wall Street expectations, they highlighted the deep uncertainty facing the energy industry at a time when depressed commodity prices have eroded profitability.
Chevron, as one of the oil industry’s leaders, is normally seen as a bellwether of sorts, and the large loss could portend ongoing deep pain.
The company lost $1.47bn, or 78 cents per share, in the quarter, compared with a net profit of $571mn, or 30 cents per share, in the year-ago period. Excluding one-time items, Chevron earned 35 cents per share. By that measure, analysts expected a profit of 32 cents per share, according to Thomson Reuters I/B/E/S.
Still, shares of Chevron fell 1.8% to $99.98 in pre-market trading.
John Watson, Chevron’s chief executive officer, said the results reflected the company’s “ongoing adjustment to a lower oil price world,” but said he remained committed to becoming cash flow neutral, or at least generate as much cash as it spends.
Production fell about 3% to 2.53mn barrels of oil equivalent per day (boe/d). The loss in Chevron’s largest segment, which produces oil and natural gas, widened to $2.46bn as the company lost money both in the United States and internationally.
Imperial Oil
Imperial Oil, Canada’s No 2 integrated oil producer and refiner, reported a surprise quarterly loss due to the impact of wildfires in Fort McMurray, Alberta.
Imperial, in which Exxon Mobil Corp holds a 69.6% stake, said its gross production averaged 329,000 barrels of oil equivalent per day (boepd) in the second quarter, compared with 344,000 boepd a year ago.
The Alberta wildfires reduced output by about 60,000 barrels per day and net income by an estimated C$170mn, Imperial said yesterday. Like many of its peers operating in northern Alberta’s oil sands, Imperial was forced to shut down its Kearl project in May as a precaution against the wildfires.
However, Imperial’s share of output from Kearl shot up nearly 20% to 110,000 barrels per day of bitumen in the second quarter.
Exxon Mobil’s Canada unit has a 29% stake in Kearl.
Total revenue and other income fell 14.4% to C$6.25bn, beating the average analyst estimate of C$5.66bn.
Xerox
Printer and copier maker Xerox Corp reported a higher-than-expected quarterly profit as restructuring efforts ahead of its planned split into two companies helped cut costs.
The company, which is splitting to separate its printer business from its business process outsourcing unit, said it slashed about 1,300 jobs globally in the second quarter.
Xerox’s total costs declined 6% to $4.24bn.
This included restructuring and related charges of $71mn, less than the $100mn the company had estimated in April.
Shares of Xerox, which said it was on track to meet its annualised cost savings target of about $700mn for 2016, rose nearly 4% in early trading yesterday.
Xerox said it expected one-time pretax separation costs of $175mn-$200mn, lower than the $200mn-$250mn it had estimated earlier.
Revenue from Xerox’s document technology business, which includes printers and copiers, fell nearly 7% but the decline slowed from 10-13% in the prior four quarters.
However, revenue rose about 1% in its document outsourcing business, the sole bright spot for the company.
Net income from continuing operations jumped 45% to $155mn, or 15 cents per share, in the quarter ended June 30.
AbbVie
AbbVie posted higher-than-expected quarterly profit and revenue, driven by demand for its flagship drug Humira, and raised its earnings forecast for the year.
Humira — the world’s biggest-selling drug — generated about $14bn in sales last year and accounted for about 64% of AbbVie’s net revenue in the quarter.
The drug, used to treat forms of arthritis and Crohn’s disease among other conditions, generated sales of $4.15 bn in the quarter, topping the consensus estimate of $3.93bn, compiled by Evercore ISI.
Amgen, as the first to seek US approval, could end up first to market, after an advisory panel to the US Food and Drug Administration backed its copycat version earlier this month.
AbbVie, however, has said numerous other patents will stave off the introduction of biosimilar forms of Humira until at least 2022.
For the second quarter ended June 30, net revenue rose 17.8% to $6.45bn. On an adjusted basis, revenue was $6.43bn, ahead of the average analyst estimate of $6.2bn.
Safran
French aerospace group Safran found itself squeezed between two massive industrial projects yesterday when investors dumped its stock for relying too heavily on its historic CFM56 jet engine, even as it races to deliver the popular successor.
Worries over the risky transition from the world’s most-sold jet engine, which powers all Boeing and many Airbus short-haul planes, to the fuel-saving LEAP overshadowed stronger-than-expected first-half profit and sent Safran stock down 5%.
“Our main concern is that the good result may owe much to higher CFM56 deliveries — at satisfactory prices — that will now start to reduce,” Jefferies analyst Sandy Morris said in a note.
Safran co-developed the CFM56 and its LEAP successor with General Electric through their CFM International venture, one of the most durable transatlantic business partnerships.
Net profit fell 26% to €862mn compared with the first half of last year, when Safran’s numbers had been boosted by the sale of shares in payments system firm Ingenico.
Cigna Corp
Health insurer Cigna Corp reported a lower-than-expected quarterly profit yesterday due to a rise in medical costs in its business that sells plans under the Affordable Care Act and a loss in its group disability and life insurance division.
Cigna’s shares fell 7.1% before the opening bell after it also slashed its full-year forecast for adjusted income from operations in the expectation that medical costs will continue to rise.
It said it now expected to earn $7.75 to $8.10 per share, compared with its earlier forecast of $8.95 to $9.35.
Cigna, which manages insurance plans for companies and sells health plans on government exchanges created under Obamacare, said the medical loss ratio in its commercial business rose to 78.8% in the latest quarter from 77.5% due to a rise in medical costs in its individual business.
The ratio reflects what an insurer spends on claims compared with its premium income — the lower the number, the better. The company said its group disability and life insurance business recorded a loss following modifications to its claims management process implemented in the first quarter.
Total revenue rose to $9.96bn from $9.49bn, missing the average estimate of $9.97bn.
UBS
UBS, Switzerland’s biggest bank, has scrapped short-term guidance on profitability due to an increasingly murky outlook for financial markets, even though its second-quarter net profit fell much less than analysts had feared.
Shares in the world’s biggest private bank rose as investors focused on the quarterly result and progress in cutting costs.
Like many rivals, UBS is battling negative interest rates, a drop in trading by clients, and turbulent financial markets, exacerbated by Britain’s June vote to leave the European Union.
“At least until we see sustainable stabilisation across the macroeconomic and geopolitical arenas, we believe it no longer makes sense to provide short-term return (on equity) guidance,” CEO Sergio Ermotti said in a call with analysts yesterday.
“However, we still believe we can achieve our targets in a more normalised environment.”
UBS’s net profit for the three months to June fell 14.5% to 1.03bn Swiss francs ($1.1bn) due to lower earnings at its wealth management and investment banking businesses.
The average estimate of five analysts polled by Reuters was for 680mn francs.
Sony Corp
Japan’s Sony Corp said a strong yen and slower smartphone sales would weigh on its cash-generating image sensor business this year, but the popularity of its PlayStation 4 videogame should help it reach its profit target.
Damage from earthquakes forced the electronics giant to partially halt its image sensor production in April, but Sony said on Friday that the damage had been less than previously expected.
Related Story
It reiterated confidence in the long-term prospects of the image sensor business, used in smartphone cameras and other appliances, and pledged to diversify clients to reduce its reliance on the stagnating smartphone market.
Sony said operating profit fell 42% in April-June from a year earlier to ¥56.2bn, as its chips division, which includes image sensors, swung to a loss of ¥43.5bn.
The loss, however, was offset by strong demand for PlayStation 4 videogame software and cost cuts in its struggling smartphone business. The gaming division, which Sony sees as its biggest growth driver in the medium term, reported profits of ¥44bn, up from ¥19.5bn a year ago.
Ambev
Ambev SA, a subsidiary of beverage giant Anheuser Busch Inbev SA, booked a weaker second-quarter profit on Friday and gave up on expanding Brazilian sales this year as demand stagnates in Latin America’s largest economy.
Ambev now forecasts its Brazilian net revenue this year to be unchanged from 2015, down from a previous estimate of single-digit revenue growth, according to a securities filing.
Brazil’s largest brewer reported an 18% drop in net income from a year earlier to 2.046bn reais ($623mn) due to higher operating, financial and tax expenses.
Financial expenses more than doubled to 900mn reais due to losses on currency hedges and interest expenses related to a sale option on an investment in the Dominican Republic.
Net sales, or total sales minus sales taxes, rose 4.7% to 10.377bn reais on growth in the Caribbean, Central America and Canada.
Earnings before interest, taxes, depreciation, amortisation and one-time effects, or adjusted EBITDA, rose 2% to 4.205bn reais.
CBOE Holdings
CBOE Holdings, operator of the largest US options exchange, reported a 13.6% rise in quarterly profit as market volatility boosted fees from transactions.
Net income allocated to CBOE’s common shareholders rose to $50.7mn, or 62 cents per share, in the quarter ended June 30, from $44.6mn, or 54 cents per share, a year earlier.
The company, which owns the Chicago Board Options Exchange, said operating revenue rose 9.8% to $163.3mn.
Excluding items, the company earned 60 cents per share, matching the average analysts’ estimate, according to Thomson Reuters I/B/E/S.
Like other exchange operators, CBOE has benefited from concerns about global economic growth, which has sparked trading activity in recent quarters.
Transaction fees rose 16.1% in the quarter, with fees from indexes accounting for 64% of these. Index options are traditionally Chicago-based CBOE’s highest fee-generating product.
Banco Popular
Spain’s Banco Popular fired CEO Francisco Gomez and announced cost cuts yesterday as it saw profit nearly wiped out in the second quarter, a month after it made a €2.5bn ($2.8bn) share issue to clean up toxic retail assets.
Popular, the publicly listed bank with the biggest exposure to Spain’s troubled retail sector, said it would begin a plan to cut costs that it expected to generate savings of around €175mn ($194mn) annually from 2017.
It also said it would split its property business from the rest of its banking activity in a bid to isolate a mountain of bad loans which have weighed on the lender’s performance and hampered its attempts to recover from a deep crisis.
“Over the last month, and following the capital increase, the board has assessed the financial challenges and the difficult macroeconomic environment and has decided to open a new chapter by separating the ordinary business from our real estate activity,” said Chief Financial Officer Francisco Sancha.
“And for this new chapter, the board wanted a new structure with a new management,” he added.
Popular’s second-quarter net profit was just €122,000, hit by bad loans and below analysts’ forecasts in a Reuters poll of 4.7mn.
Net interest income, a measure of a lender’s earnings on loans minus deposit costs, was also slightly lower, due to increased competition for lending in Spain.
ArcelorMittal
Global steel giant ArcelorMittal yesterday posted a sharp $1.1bn (€1.0bn) increase in second quarter profits, driven by rising steel prices and a one-off gain from a deal at its US subsidiary.
The figure stood in contrast with the previous quarter when the French firm, the world’s biggest steel producer, had registered a net loss of $400mn.
Revenues for the quarter amounted to $14.7bn, largely due to an exceptional gain of $832mn stemming from the reduction in health coverage for personnel at its US subsidiary, ArcelorMittal USA, a group statement said.
Over the period, EBITDA — a measure of operating profit — stood at $1.8bn, nearly double that of the previous quarter, while throughout the first half, net profits rose to $696mn.
Chief executive Lakshmi Mittal said the firm had benefited from improved steel prices, expressing cautious optimism over the rest of 2016.
“ArcelorMittal enjoyed a stronger second quarter due largely to a more supportive pricing environment in our leading markets.
Sales and EBITDA increased in all segments, including mining,” he said in a statement.
Japan Airlines
Japan Airlines said yesterday its three-month net profit more than halved as savings from a decline in fuel costs could not make up for weak travel demand at home and abroad.
Falling oil prices have helped the carrier’s bottom line — fuel is often an airline’s single-biggest expense.
JAL said the impact of killer earthquakes in April in western Japan dented tourist travel to the region and thus demand for flights, while revenue on international routes slumped amid “stagnant” demand.
The airline in a statement said net profit in April-June dropped to ¥14.7bn ($142mn) from ¥32.6bn a year earlier, as revenue inched down 4.8% to ¥297.2bn.
Revenue from JAL’s international services for the quarter dropped 9.1% from a year earlier.
“Crude oil prices, which affect our fuel purchasing costs, international passenger revenue and international cargo revenue, have been lower than the year before,” JAL said.
The airline nevertheless left its full-year forecast unchanged, projecting net profit of ¥192bn with sales at ¥1.343tn for the fiscal year to March. But analyst Hasegawa cited the rise of low cost carriers as a worry for Japanese airlines in huge regional market China.
IAG
British Airways-owner IAG trimmed growth plans for 2016 further and gave a cautious outlook for annual earnings due to weaker trading and the slump in sterling after Britain’s vote to leave the European Union.
The EU referendum outcome has caused the value of the pound to fall versus the dollar and euro, making it more expensive for Britons to travel abroad, and prompting consumer and business uncertainty.
In addition, attacks in Europe and a failed coup in Turkey have hit demand for travel, prompting rival airlines easyJet, Lufthansa and Air France-KLM to warn on the impact of political upheaval and security concerns. IAG, which includes carriers Iberia, Vueling and Aer Lingus, said yesterday it would now cut its capacity growth to 4.5% this year, down from the 4.9% rise planned in April.
Chief Executive Willie Walsh said the cuts would be across the group and added the group would look for opportunities to further trim growth later this year.
He told Irish radio that IAG was not planning similar capacity cuts in the UK to low-cost rival Ryanair.
Barclays
A corporate makeover at Barclays under CEO Jess Staley showed signs of paying off yesterday as the British bank reported an improved performance in its key businesses, helping send its shares up more than 8%.
Staley in March set out a strategy to simplify the bank’s structure and seek higher shareholder returns through the sale of the bulk of its Africa business and other assets, becoming a “transatlantic” bank focused on the United States and Britain.
It said yesterday profits from its core businesses, including consumer and commercial lending, credit cards and investment banking, rose 19% to £2.4bn ($3.2bn) in the first half.
Group pretax profit fell 21% to £2bn, largely due to a loss of 1.9bn on the non-core assets, which the bank has recommitted to offload, despite prospects of a possible economic downturn following Britain’s vote to quit the European Union.
“Our assessment is that the Brexit vote in the UK will have no effect on our ability to run down Non-Core at an accelerated pace and we therefore remain confident in reiterating our goal of closing Non-Core in 2017,” Staley told analysts.
The bank booked a £372mn impairment on the French retail banking business it is in talks to sell to AnaCap Financial Partners.
Other assets earmarked for sale include its Barclaycard consumer payments business in Spain and Portugal as well as almost all of its stake in its Africa unit.
It has already sold its Asia wealth operations and Italian banking business.