• Monday, Nov 30, 2020
  • Last Update : 03:23 am

Exxon Mobil to keep dividend flat for first time since 1982

  • Published at 08:58 am October 29th, 2020
Exxon Mobil
Logos of Exxon Mobil are seen in its booth at Gastech, the world's biggest expo for the gas industry, in Chiba, Japan on April4, 2017 Reuters

The largest US oil producer by volume was caught off guard by the sharp decline in energy prices and demand this year

Exxon Mobil Corp on Wednesday kept its fourth-quarter dividend flat at 87 cents a share, signaling 2020 will be the first year since 1982 that the US oil producer has not raised its shareholder payout.

The largest US oil producer by volume was caught off guard by the sharp decline in energy prices and demand this year. US prices are off 39% since the start of the year and global demand has tumbled due to the Covid-19 pandemic.

Exxon has pledged cost and job cuts that could be announced as early as Friday. The decision to retain the quarterly dividend could indicate it expects margin improvements from cost-cutting will allow it to continue making the hefty payout.

At $3.48 per share, the annual dividend is equal to 10.6% of its share price.

The company posted its first back-to-back quarterly losses this year and is projected to report a full-year $2 billion loss, Definitive estimates show, excluding asset sales or write-downs. It reports third-quarter financial results on Friday.

Exxon has a “narrow path” to maintain the dividend without borrowing more, said Raymond James analyst Pavel Molchanov. Even with US oil prices trading around $45 per barrel, the dividend would deplete the company’s cash balance by the end of 2021, he said.


Also Read- Oil falls more than 2% as Covid-19 infections raise demand concerns


BP PLC, Equinor ASA, and Royal Dutch Shell PLC earlier this year cut their shareholder payouts by at least half.

Four years ago, Exxon stopped buying back its own shares, giving greater prominence to the dividend, which reached $14.7 billion last year. Officials said in July they were committed to maintaining the dividend.

“We have doubts about the sanctity of the dividend longer-term,” said Jennifer Rowland, an analyst with Edward Jones. “There is greater potential for a dividend reduction in 2021 if demand doesn’t fully recover.”

Exxon shares traded at $31.57 on Wednesday, down 3.8%, and at the lowest point in more than two decades. The dividend announcement came after the market close.

50
50
blogger sharing button blogger
buffer sharing button buffer
diaspora sharing button diaspora
digg sharing button digg
douban sharing button douban
email sharing button email
evernote sharing button evernote
flipboard sharing button flipboard
pocket sharing button getpocket
github sharing button github
gmail sharing button gmail
googlebookmarks sharing button googlebookmarks
hackernews sharing button hackernews
instapaper sharing button instapaper
line sharing button line
linkedin sharing button linkedin
livejournal sharing button livejournal
mailru sharing button mailru
medium sharing button medium
meneame sharing button meneame
messenger sharing button messenger
odnoklassniki sharing button odnoklassniki
pinterest sharing button pinterest
print sharing button print
qzone sharing button qzone
reddit sharing button reddit
refind sharing button refind
renren sharing button renren
skype sharing button skype
snapchat sharing button snapchat
surfingbird sharing button surfingbird
telegram sharing button telegram
tumblr sharing button tumblr
twitter sharing button twitter
vk sharing button vk
wechat sharing button wechat
weibo sharing button weibo
whatsapp sharing button whatsapp
wordpress sharing button wordpress
xing sharing button xing
yahoomail sharing button yahoomail