Dow dropped 423, decliners over advancers 3-1 & NAZ sank 312. The MLP index fell 2+ to the 109s & the REIT index lost 5+ to the 332s, Junk bond funds drifted lower & Treasuries were sold. Oil fell to the 35s & gold rebounded 13 to 1881.
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Exon Mobil (XOM), a Dow stock & Dividend Aristocrat, reported its 3rd straight qtr of losses as depressed
oil demand sparked by the coronavirus pandemic weighed on its
operations. During Q3, the company lost $680M, although XOM said results improved on a qtr-over-qtr
basis thanks to “early stages of demand recovery.” On
an adjusted basis, EPS was a lost 18¢ per share
while generating $46.2B in revenue. The forecast called for a 25¢ loss per share & $46B in revenue. A year ealier,
the company had EPS of 75¢ on $65B in revenue. During Q2 of 2020, XOM lost 70¢ per share on an
adjusted basis, while revenue came in at $32.6B. “We
remain confident in our long-term strategy and the fundamentals of our
business, and are taking the necessary actions to preserve value while
protecting the balance sheet and dividend,” CEO Darren
Woods said. “We are on pace to achieve our 2020 cost-reduction targets
and are progressing additional savings next year as we manage through
this unprecedented down cycle.” The company previously announced a
reduction in its capital spending program — from $33B to $23B — & said it's ahead of schedule due to increased
efficiencies & a slower project pace, among other things. The company
is targeting to spend $16-19B in its 2021
capital program. XOM intends to reduce its US staff by 1900 employees, with global workforce reductions potentially rising to as much as 15%. XOM has a global workforce of 88K, including 13K contractors. XOM has repeatedly said its div remains a priority & Wed the company maintained its Q4 div at 87¢
per share. But it was the first time since 1982 that the company didn't
raise its payout.& XOM has repeatedly said its div remains a priority. Wed the company maintained its Q4 div at 87¢. But it was the first time since 1982 that the company didn’t
raise its payout. The stock was off 69¢.
If you would like to learn more about XOM, click on this link:
club.ino.com/trend/analysis/stock/XOM?a_aid=CD3289&a_bid=6ae5b6f7
Exxon reports third straight quarter of losses with revenue down nearly 30%
Chevron (CVX), a Dow stock & Dividend Aristocrat, reported its 2nd straight qtr of losses after revenue during Q3 fell 32% year over year, hammered by Covid-19. Amid declining oil prices CVX said it implemented aggressive cost-cutting measures. The
oil giant lost $207M. On an adjusted basis, EPS was 11¢, far better than the 27¢ per share
loss expected. Revenue came
in at $24.5B, which missed the estimate of $25.8B. During Q2, the oil giant lost $1.59 per share on an adjusted basis, while revenue came in at $13.5B. In Q3 a year earlier, the company had EPS on $36.1B in revenue. “Third
quarter results were down from a year ago, primarily due to lower
commodity prices and margins resulting from the impact of COVID-19,”
CEO Michael Wirth said. “The world’s economy
continues to operate below pre-pandemic levels, impacting demand for
our products which are closely linked to economic activity.” As
energy companies struggle amid depressed oil prices, CVX said its
capital spending declined 48% & its operating expenses were down 12%. “We
remain focused on what we can control — safe operations, capital
discipline and cost management,” Wirth added. On Wed the company
declared a quarterly div of $1.29. The stock added 72¢:
If you would like to learn more about CVX, click on this link:
club.ino.com/trend/analysis/stock/CVX?a_aid=CD3289&a_bid=6ae5b6f7
Chevron revenue plummets more than 30% as Covid slams demand
The Federal Reserve has lowered the barriers on its lending program for smaller businesses as part of an effort to broaden the appeal of the sparsely used facility. In another pair of tweaks to its Main Street Lending Program (MSLP), the Fed said it is reducing the minimum loan size to $100K from $250K & will ease restrictions on debt for companies already participating in the Paycheck Protection Program.(PPP). Aimed at helping small- & medium-sized firms get thru the Covid-19 pandemic, the program thus far has issued nearly 400 loans for a total of $3.7B. The total capacity of the MSLP is $600B, thanks to $75B in collateral from the Treasury Dept that can be leveraged up. The Fed said the changes are “two important ways to better target support to smaller businesses that employ millions of workers and are facing continued revenue shortfalls due to the pandemic.” Both borrowers & lenders have complained, however, that some of the conditions of the loans are too stringent & the fees are more onerous than they’re willing to pay. Where the PPP loans are forgivable under many circumstances, the Main Street loans are not, further dampening their appeal. The other change apart from the minimum loan requirement exempts up to $2M in PPP loans when computing applicants' debt loads. The Fed also said it is adjusting fees “to encourage the provision of these smaller loans.” The move comes amid heightened concerns about an economic slowdown heading into the winter, triggered both by a rise in coronavirus cases & a continuing stalemate in DC over further fiscal relief. Fed officials repeatedly have called for more stimulus from Congress, but the White House & congressional Dems have been unable to reconcile their competing proposals.
Fed lowers minimum loan level for small business lending program
Dow Jones Industrials
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