ExxonMobil (NYSE:XOM) booked its first annual loss since the 1999 merger of Exxon and Mobil, and the first annual loss in at least 40 years after the pandemic crushed oil demand and prices and led to a huge domestic gas asset impairment.
ExxonMobil reported on Tuesday a loss of $22.44 billion for 2020, compared to earnings of $14.34 billion for 2019, due to the lower oil and gas prices and after-tax fourth-quarter impairment charges of $19.3 billion.
The impairment charge and the loss for the fourth quarter were not unexpected—Exxon had guided for a massive loss for Q4 due to a write-down of up to $20 billion of gas assets.
The fourth-quarter loss stood at $20.1 billion, including unfavorable identified items of $20.2 billion, mostly the impairments.
Excluding the impairments, Exxon squeezed earnings of $110 million, or $0.03 per share assuming dilution, for Q4. The fourth-quarter earnings excluding the huge write-down beat the consensus estimate of the Wall Street Journal of earnings of $0.01 per share.
After the results release, Exxon’s shares were up by 2 percent in pre-market trade.
Still, the massive impairment dragged Exxon into a Q4 loss, which was the fourth quarter in a row in which the U.S. supermajor has reported losses—all on the back of the crash in oil prices and demand in the pandemic.
“The past year presented the most challenging market conditions ExxonMobil has ever experienced,” Exxon’s chairman and chief executive officer Darren Woods said in a statement.
Apart from reporting Q4 and 2020 results, Exxon announced today the creation of a new business—ExxonMobil Low Carbon Solutions—to commercialize plans for more than 20 new carbon capture and sequestration (CCS) opportunities around the world.
In recent months, Exxon has come under intense pressure from shareholders, including a new activist investor seeking long-term policy changes at Exxon and urging the largest U.S. oil firm to start thinking of its business in the energy transition.