Seriously, our current strategy seem designed to make us go ot of business. What is the leadership thinking? I feel like a passenger who is watching a slow motion of an impending crash and there's nothing I can do because the driver refuses to change course. And honestly, as much as I don't like Exxon, it's not fun having to watch it fail - especially from the inside.
32 replies (most recent on top)
Remove the dividend for three quarters until XOM can break even.
@cym+16YVwxCK Seriously no better options? They could have used the money to invest in XLE or DOW. We should be better off.. continue paying is merely to protect one’s ego.. good luck to sustaining that.. we all know what will happen if they cut the dividends.. seriously is Darren Woods still around?
No, bankruptcy is not the goal, but distributing the company is. Even when we made money we did not have good investment options. That's why we bought stock back and gave away dividend. TL; DR: we don't know of any good way to make money, so we might as well distribute the company back to its shareholders through dividends
@gao+16YVwxCK you really are slow. Did you get PIP'd?
Options Traders Are Pricing In an Exxon Dividend Cut, Analyst Says
https://www.barrons.com/amp/articles/options-traders-are-pricing-in-an-exxon-dividend-cut-analyst-says-51600181938
PLASTICS!
That was shouted out - o yeh - when Dustin Hoffman floated in the pool.
Way back then.
Recycling is a CON JOB. Stwait and simple.
Half the plastics recycling is why recycling means nothing now - or probably ever.
Recent articles - in the wail pod.
So what do you think is really next?
I'm investing in that new Guillotine tech company - where your read a text and it cuts the head.
Always cutting, never replacing.
@mhi+16YVwxCK Nope! Wrong.. it’s pricing as though the dividends will not be cut. Sit back, relax and enjoy the show..
Since when is the world's leader in spills in the gulf of Mexico and process safety incidents the leading guide in how to operate successfully in the O&G space? BP has been a failing company for a while now.
https://www.houstonchronicle.com/business/columnists/tomlinson/article/BP-buries-dagger-into-oil-gas-industry-heart-15569656.php
“Energy lives here”
Have you noticed that most of the world still has power and industries keep producing with someone’s energy?
The only thing that’s really down is jet fuel consumption.
And that’s enough to bring Exxon to it’s knees.
So we aren’t in the business of providing “energy” to the world or even raising the standards of living of those energy poor around the world.
No - our business model is two fold:
- Fracking for plastics
- High combustion liquids
Which one of those stays untouched for the next decade as the world changes and electrifies with low carbon sources?
If only some of those ~$240 billion dollars that went to share buybacks and dividends over the past decade would have been invested in diversification, we might even be thriving and not about to chop an arm and a leg.
Our “leaders” are such “winners”.
It's likely the stock market has already factored a dividend cut into the Exxon's stock price. Investors are aware the dividend payout creates a cash flow problem and they've priced the stock accordingly. Is seems counter intuitive, but under the circumstances a cut in the dividend might actually help investor and the company. At least it would slow the cash drain.
Thanks for that article, peckerwoods.
Read that - and some comments on the article.
This comment is pretty clear about it, too.
COMMENT from SeekingAlpha on XOM:
$XOM has gone down 15 days in a row, equal to longest losing streak ever. The price collapse has pushed its yield up to 9.5%.
For anyone here interested in the expert opinion of the CEO of the world’s fifth-largest international oil company BP, he has given an extensive interview outlining his strategy to deal with the new realities of the energy market.
The change has been so profound that the chief executive officer of BP Plc recently found himself hyping the profit potential of another commodity:
“People may not know it, BP sells coffee. We sold 150 million cups of coffee last year,” Bernard Looney said in an interview, referring to the run ins attached to the company’s fuel stations. “This is a very strong business. It’s a growth business.”
One lump or two?
BP and Royal Dutch Shell Plc have already slashed their dividends. For Shell it was the first time in nearly 80 years. Returning profits to shareholders has long been a pillar of oil’s strength on financial markets. And those like Exxon who are keeping their shareholder payments untouched are taking on far more debt to do so.
So the current dividend return (last quarter) for EM stock is 9.4% annually.
The current 10-year Treasury bond in US is what? 0.8%.
One might think: "Can you beat that? Nearly 10%!!".
Article below thinks indeed you can beat it!
Like an old mule or an old hand-tied Shiraz carpet from the floors of Dallas.
https://seekingalpha.com/article/4374048-retirement-strategy-2020-miserable-for-humanity-and-exxon-mobil-make-things-worse-for-dgi
@ugl+16YVwxCK in the middle of a demand crash. Are you typically a mo–n, or do you have zero business sense?
Dude. They cut almost all projects to cover the dividend and still didn't make it. They cut our 401k. So I guess as long as we don't invest and cut the dividend....sounds like a really bright future.
No. I'm not concerned. EM just cut billions of dollars worth of projects/opex expenses that had required workers to progress. There is no work for a large percent of the company now, so why do they still need to be employed?
Like any business, lower margin means run more lean. Looking at efficiencies for work processes have definety been needed for a long time now.
Dude. The dividend does not need to be paid to keep the lights on for the company and prevent it from filing for bankruptcy.
@khq+16YVwxCK you aren't concerned that we require mass layoffs to manage a temporary decrease of demand by 10%?
How is that not concerning?
I dont understand the lengths people go to to ignore warning signs.
Landline phones are still in demand, but how long did it take for cellphones to cause enough of a decrease in demand to cause AT&T to revamp their whole business model? Not much. Same here. If your whole business plan relies on realizing demand that may never happen due to new tech/regulation/foreign government adjusting supply than there are serious concerns here. Choosing to be willfully ignorant doesn't change facts.
Dividend will be cut if company doesn't have the money to pay all the dividend. If the company doesn't have all the money to pay the dividend, it doesn't mean it will go backrupt because it can pay the bills for the operations.
You people are id–ts if you can't understand that the dividend is not a guaranteed cost for the business.
Sounds to me like you can't comprehend anything and need moodys to spell it out for you.
Anyways all of us here are smarter than Moody’s. I’m sure Moody’s doesn’t have a clue what they are doing /s
@xsp+16YVwxCK Unless you have a different radio channel than me I’ve yet to hear or see 1 XOM communication that suggest the dividend will ever be cut. So I haven’t assumed it will be cut. I’ve included it in my thoughts just as instructed. If you can find a place that says the dividend will be cut let me know.
Without the dividend, the companies financies are just fine. Look at net profit prior to covid shutdown. Or are you incapable of reading into anything business related?
@itz+16YVwxCK that is including costs to cover the dividend you mo–n.
@itw+16YVwxCK Where did you read the company has been free cash flow positive pre-covid.
I don’t even feel like getting into the math with you...but here is a Moody’s document from last XOM downgrade that specifically addresses cash flow & is pre-covid. No math just reading.
https://m.moodys.com/research/Moodys-changes-ExxonMobils-outlook-to-negative–PR_413126
Please give people good facts. If link doesn’t work just google “XOM downgrade Moody’s” even before covid the credit agencies were concerned...... they pegged Brent at $60/bbl
“New York, November 19, 2019 – Moody's Investors Service (Moody's) changed Exxon Mobil Corporation's (ExxonMobil) outlook to negative from stable. Moody's affirmed the company's and its guaranteed subsidiaries' Aaa issuer and senior unsecured ratings as well as its P-1 short term ratings.
"ExxonMobil's negative outlook reflects the company's substantial negative free cash flow and expected reliance on debt to fund its large growth capital spending program," commented Pete Speer, Moody's Senior Vice President. "We forecast debt to rise, despite some potential mitigation from asset sales, causing ExxonMobil's credit metrics to weaken for the next few years."
RATINGS RATIONALE
Moody's forecasts that ExxonMobil's negative free cash flow will be around $7 billion in 2019 and $9 billion in 2020. These forecasts reflect a Brent oil price assumption of $60 per barrel and some earnings growth in downstream and chemicals in 2020 but margins that remain cyclically weak, particularly in chemicals. Negative free cash flow is likely to continue in 2021, with the company's debt levels rising materially even if the company achieves it targeted asset sales of $15 billion over the period.” - Moody’s
The 20 O&G companies had massive debt/revenue rations AND were only upstream companies. Do you have your head in the Sand and not understand how the companies operate? EM has all upstream and downstream to keep the business afloat.
You are kidding yourself if you believe that O&G in the next few years will have reduced demand. Covid-19 in all its damage only whacked 10% of global. Starting in 2014, there was years of ~$40/bbl wti crude. EM didn't go out of business then, nor will it go out anytime soon.
With this type of “ we are still the best and the demand is going up” attitude Exxon will file for bankruptcy in the next few years. There is an article out with 20 oil and gas companies that filed for bankruptcy in the last few months. How are we different besides the massive size?
We are winning in the most Charlie Sheen sense of the word
EM is not going to go bankrupt. The big delta in revenue vs expenses is the dividend. At some point, that is going to have to give.
Besides the last 2 quarters, the company has been cash flow positive. That will continue coming out of the pandemic.
Maybe that’s one way to offload that much debt: or trigger a bailout?
Either way it seems id–tic - basically true to form.
Winning the race to the bottom!
It was starting to seem like that was the goal around the time we moved to the new campus.
@OP+16YVwxCK We are winning. Not sure what you are talking about.. WINNING!