Chevron, Exxon and other oil companies’ quarterly results could be ‘messy,’ analysts say

Published: Apr 12, 2017 7:16 a.m. ET

Analysts expect better luck in the second quarter, in a tighter oil market

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Steam rises from stacks at a Phillips 66 refinery in California.

Major energy companies including Chevron Corp. and Exxon Mobil Corp. are likely to disappoint investors when they report first-quarter earnings in the next weeks.

That’s the sentiment of analysts at Barclays, who also say first-quarter results could be “messy” for U.S. refiners.

The analysts forecast Chevron CVX, -0.28%  to report first-quarter earnings of 78 cents a share, compared with a Wall Street consensus of 92 cents a share.

The consensus “may not have fully reflected the lower oil prices in March. We also think the market may have overestimated the company’s downstream earnings and chemical results,” the analysts said.

For Exxon XOM, +0.14% the Barclays analysts forecast first-quarter earnings of 79 cents a share compared with Wall Street consensus of 89 cents a share.

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The company’s fourth-quarter results included asset-sale gains between $800 million and $900 million, “something we suspect the market has not fully taken into account when considering 1Q17,” the analysts said.

Exxon and Chevron are expected to report first-quarter earnings on April 28 before the market open.

They highlighted Suncor Energy Inc. SU, -0.05%  as a top pick among energy companies, expecting a third straight earnings beat for the Canadian exploration and production company. ConocoPhillips COP, -0.56%  is another favorite, on the strength of the company’s recent sale of Canadian oil sands assets.

For refiners, the Barclays analysts forecast a better year-over-year earnings comparisons starting in the second quarter as crude-oil inventories are seen below the usual for the rest of 2017.

U.S. crude inventories will begin to draw down in the next two to three weeks, they said.

The Energy Select Sector SPDR Fund XLE, -0.15%  has fallen about 6% in 2017, while the S&P 500 SPX, -0.40% has gained 5%.