XOM & CVX historical earnings troughs

The Gist: (1) Since the breakup of Standard Oil, ExxonMobil and Chevron’s earnings decline cycles have averaged approximately ~24 months, with an average inflation adjusted EPS decline of approximately 50%. (2) Historical analysis like this should never be taken as an absolute, but it is always useful to understand where the goalposts are. In this case, (3) the goalposts suggest that it may soon be time to start watching for a reacceleration in Big Oil earnings driven by refining.

My days of publishing earnings estimates are long gone.

I was never that good at it anyway.

My value these days lies in providing historical context to the present situation.

For the past two years, energy has underperformed, driven by declining earnings from the two bellwethers, ExxonMobil and Chevron.

Since the breakup of Standard Oil, ExxonMobil has now experienced 20 instances in which EPS, adjusted for inflation, has declined by more than 10% from peak to trough.

You’ll note that the average duration of each EPS decline greater than 10% has lasted 21 months with an average % decline of approximately 50%.

The same holds true for Chevron.