Exxon and Chevron: same quarter, opposite reactions
Rising crude oil prices helped both companies over the quarter, but their results split them. Chevron beat on earnings and its shares rose. Exxon missed on earnings and its shares fell.
Both have led the market this year. Coming into the day, Chevron was up more than 25% year to date. Exxon was up about 30% year to date and about 40% year over year. Chevron's gain may be partly profit taking.
Chevron's adjusted earnings came in at $6.06 per share, a big beat against the $5.56 expected. Revenue topped $70 billion, well above the $61.9 billion forecast. Exxon reported $3.52 per share, weaker than expected, while its revenue reached just above $116 billion, which beat estimates. Margins for refining products like jet fuel, diesel, and gas climbed to records.
Oil prices eased late in the quarter on hopes for a lasting peace deal between the US and Iran that would reopen trade. That gave way to a cycle of escalation and deescalation. What happens to Exxon and Chevron tracks the price of crude, which has stayed high this year.
Exxon reported its highest oil and gas production in more than 20 years, excluding disrupted output in the Middle East. That disrupted region accounts for about a fifth of production, and about a fifth of the world's oil supplies pass through it.
Oil is not spooking the market today, which surprises me. Often oil rises and stocks sell off on the nervousness. The president is going to Camp David today to meet with officials about Iran. Volatility in oil continues, but the two stocks are behaving differently.
Reddit: strong numbers, falling stock
Reddit beat across the board, including guidance, yet the stock has a down arrow. One worry overshadows everything: its relationship with Google.
Revenue came in at $805 million, beating expectations. Adjusted EPS was $1.25, also better than expected. Revenue jumped 61% year over year, and profit nearly tripled from a year ago. Guidance was even stronger, with Q3 revenue guided between $860 and $870 million and adjusted EBITDA above expectations.
The problem is Google traffic. The CEO said search referrals were "choppy." Many people run a Google search, then add "Reddit" to the query to read what real users say, for example "best credit card Reddit" or "best gaming laptop Reddit." If Google increasingly answers those questions itself with generative AI summaries and Gemini, Reddit loses that traffic. The concern is slower user growth.
Reddit and Google have a $60 million a year deal, and that deal is tied to the choppy search situation. At least one report says Reddit might consider walking away from it.
Rivian: a beat, then a fade
Rivian traded higher before the open, then pulled back in the last few minutes. It beat expectations. Revenue rose 27% year over year to more than $1.6 billion. The loss was 63 cents per share, better than expected, with less red ink than feared.
The vehicle business is improving. Deliveries rose 14%, and more revenue came from regulatory credits, so revenue per vehicle is climbing too. Software and services is becoming an advantage and may explain the pre-market gain. That segment generated $515 million in revenue and $215 million in gross profit, and it covers software partnerships, services, and technology licensing.
Rivian slightly narrowed its loss forecast to between $1.8 and $2 billion and reaffirmed plans to deliver 65,000 to 70,000 vehicles this year.
Lucid gets a Saudi boost
Lucid stock is up about 25% this week on an investment from Saudi prince Ali bin Talal. It is another EV name climbing on that news.
