Wall Street is expecting to see improvement in quarterly earnings as oil majors begin reporting this week after many of the world's biggest energy companies missed forecasts in the second quarter.
The last round was indeed a dramatic one. Exxon Mobil fell far short of forecasts due to weakening refining operations, while its smaller peer Chevron surprised investors with a loss of $1.5 billion as it booked $2.8 billion in impairments. Royal Dutch Shell whiffed on earnings forecasts to the tune of about $1 billion. BP reported a $2.25 billion net loss as costs related to the Deepwater Horizon oil spill continued to bite.
The majors are not off to a good start this earnings season. Norway's Statoil, the first among the energy behemoths up to bat, on Thursday reported adjusted operating profit fell nearly 70 percent from the same time last year to $636 million, missing estimates by more than $300 million.
For the rest of the space, analysts are expecting earnings to decline on the order of 30 to 85 percent from the year-earlier period. That said, many majors saw results improve from the first quarter of the year in the last reporting period, and analysts are anticipating another sequential improvement in the third quarter after a continued rebound in crude prices.