Exxon Mobil (XOM) is keeping its annual dividend steady for the first time in nearly 40 years as Friday’s quarterly report is expected to show more losses. Exxon stock rose.
The oil major will pay out 87 cents per share in Q4, the same dividend it paid out in Q3, after freezing it earlier this year amid an epic collapse in oil prices. That means 2020 will be the first year since 1982 that the Exxon stock dividend will not see an annual increase.
Meanwhile, Royal Dutch Shell (RDSA) raised its dividend 4% to the equivalent of about 33 cents per U.S.-listed share after reporting Q3 profit that beat expectations Thursday. But the European oil major had cut its dividend in April, so the increase brings the dividend to just a third of its 2019 payout.
Also Thursday Chevron (CVX) maintained its quarterly dividend at $1.29, which was increased earlier this year.
Exxon’s move to keep its dividend steady comes as Wall Street expects more losses for Q3, along with rival Chevron.
Estimates: A loss of 28 cents per share vs. earnings of 68 cents per share in the year-ago quarter. Revenue is seen falling 24% to $49.5 billion.
Results: Check back Friday morning before the market opens for results.
Stock: Shares rallied 4.5% to close at 32.98 on the stock market today. Exxon stock is rebounding after approaching March lows while its 200-day and 50-day lines continue to drift lower, according to MarketSmith chart analysis.
Earlier this year, CEO Darren Woods said that 70% of the oil major’s investor base is made up of retail and long-term investors that expect a strong Exxon stock dividend. To protect its payout, the company is preparing steep spending and job cuts as oil prices remain low.
Exxon has already cut investment by $10 billion so far this year and expects its rig counts in the Permian basin to continue to fall. On Thursday, the company said it will reduce its U.S. staff by 1,900 after announcing 1,600 in cuts to its European headcount earlier this month. Overall, it plans to eliminate about 14,000 positions.
Estimates: Analysts see a loss of 31 cents per share vs. a profit of $1.59 per share in the year-ago quarter. Revenue is seen falling 24% to $27.3 billion.
Results: Check back early Friday morning.
Stock: Shares reversed higher to finish up 3% 68.86 Thursday.
Chevron closed its deal to buy Noble Energy earlier this month, expanding its shale operations. The company has invested heavily in the Permian Basin ahead of the coronavirus pandemic and oil price collapse.
Chevron has also been active overseas. In August, Chevron was among the energy stocks that announced agreements that are worth up to $8 billion with the Iraqi government. The oil giant approved a framework for exclusive negotiating for an exploration, development, and production contract in a major oil field in the Dhi Qar Province.
Oil companies were hit hard as oil prices tumbled during the early part of the Covid-19 pandemic. Exxon stock got kicked out of the Dow Jones Industrial Average on Aug. 31 after over 90 years on the key index. But Chevron stock remains a blue chip.
Follow Gillian Rich on Twitter @IBD_GRich for energy news and more.
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