‘We Are Not Happy,’ Exxon Says, Delivering a Rare Mea Culpa
(Bloomberg) -- No one told Exxon Mobil Corp. “great quarter, guys” on Friday. Instead, Wall Street lambasted the company’s performance, which saw oil output plunge to a 10-year low. Perhaps even more surprising, Exxon delivered a mea culpa.
The results were “disappointing” and “a low point,” executives said. “We are not happy with the reliability performance,”’ said Neil Chapman, one of the top echelon of five executives who oversee the company’s day-to-day operations.
Exxon not only failed to live up to earnings, cash flow, debt and output expectations, but offered no new payouts to shareholders and trimmed its full-year production target. Exxon’s stock dropped the most since April 27 -- the last time the company published an earnings report.
Friday’s conference call marked a sea change for Exxon, which reversed its historic policy of shielding top executives from inquisitive analysts and investors on quarterly conference calls. The conference call policy -- an anachronism from the era of Lee Raymond and Rex Tillerson -- put Exxon at odds with peers that regularly make chief executives and other senior managers available on the calls.
In a completely different tone from Exxon’s famously dry and detail-free calls, Chapman frankly discussed the company’s challenges and outlook. Of the production target reduction, he said: “It’s not a big deal but it’s important to highlight what it is.”
Despite the new openness, Wall Street was unimpressed. Veteran oil analyst Jason Gammel of Jefferies LLC titled a note to clients, “Exxon Mobil: Misses Across the Board.”
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