Why ExxonMobil missed 2Q13 earnings expectations (Part 4 of 6)
Chemicals segment was weaker in 2Q13
Quarter-over-quarter, XOM’s chemical segment earnings were down $381 million. The company cited lower margins due to weaker aromatics prices as the reason for the $200 million earnings reduction, partially offset (with $30 million) by an improved sales mix (which generally means more sales volumes of higher-margin products). Aromatics comprise benzene, toluene, and xylenes, which are used in a variety of end products. Prices may have been under pressure either due to weaker demand, more supply, or a combination of both.
Further, $210 million of the quarter-over-quarter reduction in earnings was due to start-up costs from a new facility in Singapore and the absence of gains from prior quarter asset sales.
Browse this series on Market Realist:
- Part 1 - ExxonMobil overview: Why care about ExxonMobil?
- Part 2 - Lower margins and refinery downtime hurt XOM downstream earnings
- Part 3 - Why ExxonMobil’s downstream segment is still a risk despite a blip
- Basic Materials Industry