Chevron Corporation (CVX) & Exxon Mobil Corporation (XOM): What’s The Difference?

Page 1 of 2

As energy producers continue their balancing act between oil and natural gas production, price swings have left two of the industry’s biggest producers scratching their heads. For the past few years, low natural gas prices have left these producers looking for more oil. Now, with the price of crude oil falling in the first quarter, it left both Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) staring at weaker revenue results from the year before.

Luckily for Exxon Mobil Corporation (NYSE:XOM), its refining business helped pad margins despite the segments’ profits falling 2.6%. Overall, Exxon was able to grow its earnings by $50 million year over year. While that might not sound like a lot, because it’s an expert share repurchaser, this represented 6% earnings growth on a per-share basis.

Unfortunately, Chevron Corporation (NYSE:CVX) wasn’t so lucky as its integrated business was affected by downtime at two of its refineries. The company’s Richmond, Calif., plant has been down since last August’s fire, while the Pascagoula, Miss., plant experienced preannounced maintenance in the quarter. What that meant for Chevron is that as upstream earnings fell from $6.17 billion to $5.52 billion year over year, the problem was compounded as downstream earnings slipped, too, from $804 million to $701 million. Together, this contributed to an earnings drop of about 3% per share.

What we’re seeing in the quarter is that Exxon Mobil Corporation (NYSE:XOM)’s integrated asset base really helped to bail it out, while Chevron Corporation (NYSE:CVX)’s didn’t. That’s rather interesting, considering that Exxon has been so vocal about exporting LNG, which would affect the chemicals side of its business.

Sure, Exxon wins either way, but considering that its chemical business fetched 62% more profit year over year for a total haul of $1.1 billion, the company would have been in the same boat as Chevron Corporation (NYSE:CVX) if it wasn’t bailed out by these profits. This is especially true when you factor in that these margins were made possible by low natural gas. With that context, you have to wonder why it’s so vocal to export our excess gas.

The Dow Chemical Company (NYSE:DOW) has taken the opposite argument for exactly this reason. Feedstock costs are at rock-bottom levels because of the natural gas production surge, which has slashed prices. The Dow Chemical Company (NYSE:DOW) says it and its chemical manufacturing brethren such as Huntsman Corporation (NYSE:HUN) will create more jobs in the U.S. than if LNG is exported.

Source: Dow Chemical.

Huntsman Corporation (NYSE:HUN) CEO Peter Huntsman has been just as vocal, saying that increased exports will cause “our nation’s natural gas advantage to be stripped and sent overseas to build a new manufacturing base that would otherwise be built here in the U.S.” That statement is certainly debatable, as a government study, which, while agreeing that exports would increase the price of natural gas, also noted that exports would be a net positive benefit to our economy. In fact, it sees $47 billion in new economic activity even with unlimited exports.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!