More Energy Majors to Weather WTI Pressure?

Oil majors saw outstanding results in the first quarter, thanks to the high crude prices. But crude was under pressure the last three months, so how much will that affect earnings?

The Positive Signs

Chevron was the first of the "Big Six" to give a look at its financials, with somewhat mixed results despite the market taking them as positive. Earnings were lower, as is logical, given lower crude prices. But, they were higher than the market expected, and the company announced it had given record shareholder distributions. That gave the stock a boost. On the other hand, there was a shake-up in management, and the CEO was kept on beyond retirement. The company will issue its full earnings later this week.

Some analysts suggest this could be a theme for the other majors to report in the coming days. Even though prices were lower, companies like Chevron could still beat projections through cost management and increased production. And investors could have a positive view of the companies despite a slowdown in earnings if guidance is at least maintained.

What's Coming Up

Shell is expected to see earnings dip to $1.75/sh on $66.8B in sales. Assuming the company maintains healthy margins, the focus will likely be on further buyback plans. However, the seasonal drop in natural gas prices might impact the funds available for distribution.

BP is expected to see earnings slip to $1.14/sh on $52.8B in sales. The company's capex plans are likely to be the focus for investors as it tries to adjust ahead of the energy transition, at the cost of having more cash to distribute to shareholders.

ExxonMobil's earnings are expected to hold up relatively well at $2.06 on $82.8B in sales thanks to a similar environment as Chevron: Increased production offsetting the price drop. Investors will likely be keen to see what happens to the dividends and the size of the buybacks going forward.

TotalEnergies is expected to see a modest decline in earnings to $2.08/shr or $52.0B in sales. The company is also doubling down on renewables, buying up the remaining interest in Eren. But that might leave less funds available to pay dividends, which could be a focus for investors.

Marathon Petroleum's revenue is expected to remain relatively steady at $32.6B but see a drop in earnings to $4.55/shr. The drop in gasoline prices over the last few months is expected to take a bigger toll on the company as it makes most of its revenue through refining.

SHELL Breaks Outside Triangle

Shell recently broke outside its triangle, opening up 2850p as part of the measured-move projection. Getting there requires reclaiming 2500p and 2615p, whereas in the short-term, bulls must take control of the regional top of 2445p. If pressure continues to reach below 2280p, the pattern could get invalidated, exposing both 2250p and 2215p supports and increasing the chances of a breakdown under 2150p.

Source: SpreadX / SHELL PLC

Key Takeaways

Oil majors have experienced mixed financial results in the first quarter due to fluctuating crude prices. Chevron's earnings were lower than last quarter's but higher than expected, and record shareholder distributions boosted its stock. Other energy majors may also beat projections through cost management and increased production. Shell is expected to see a dip in earnings, while BP focuses on capex plans for energy transition. ExxonMobil's earnings are predicted to hold up well due to increased production, and TotalEnergies may see a decline in earnings due to investing in renewables. Marathon Petroleum's revenue will likely remain steady, but earnings may drop due to decreased gasoline prices. Shell's stock recently broke outside its triangle pattern, with potential targets at 2850p but facing the risk of breakdown under 2150p.