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Breakingviews: Exxon's buyback flub

Thursday, August 01, 2013 - 03:17

Aug 1 - Antony Currie and Christopher Swann explain why the oil giant's lackluster second-quarter showing and cash pile aren't the only reasons why it should reconsider its share repurchase policy.

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Exxon has lost some of its shed by about merger and that is no plan saying that Chris they have their earnings out today and amongst some -- That earnings are down 20% compares -- so sick cutting back they share -- three billion quarter which is a lot of money but you'll saying. Hey it's good it's a good on one hand on another much want to scale is that explains meet a lot the problem is with that check -- -- -- Well essentially they've always had this. Very indiscriminate habit of buying back shares whenever they have cash on hand in the Travis they have -- cash on hand when the oil prices high crisis I respect share price -- And then -- I've had a -- price -- may have less money they buy back fewer yet. So that that's pretty lunatic way of spending channeled the money much better when you got that cash on hand. Just give it directly back to shelters they can decide if you want more Exxon -- let them buy it and -- history through dividends -- -- -- a case. So it is say that that but they've been spending policies buying at the -- -- I seem to think just let it draw. Back when net earnings to attempt to say that -- -- -- that's very map shows you wanna buy it at the low point if you possibly can save money revenue. So it but it coming back now they would do it looks like billion of course fools. 23 years that -- second quarter they kind of a full notice things directs this -- -- -- effectively going to be. Page forty missing cult on this time last year say. Why isn't this good news. Well I think they'd be of any reason they're doing it is because special tents backpacks that made up expect capital spending massively in production is not tops and a couple of these moments to projects that are costing billions and billions. And I'm not gonna produce any. The black stuff for a couple of years. But my suspicion is that the moment against the -- so be right again Mac had seen that experience chances what does that make social some basis at least -- noticing I think -- pilots -- sets a quota they have not been attached the beginning may have sixteen and I think I K. We -- to bigger discrepancy in which cup Tacoma is fine yeah. But I need receive treatment they -- at one stage at 41 billion dollars of cash in 2000 and I want to say that's probably a little too much. That six Italian bank getting at obviously they have I've rock solid debt balance sheet it's not that they haven't -- -- that and bad even for a company that's that tidbits this solid. They really need to trim that back. Policy -- your announcement that they've. They've invested a lot of money but a lot of fruits of that investment board to -- streets at 234 years yet they have that gigantic projects in that in Canada but -- can be really nice assets for investors and they can't -- And yielding oil for very very long time at a very high right. That's trumpeted we have to wait another couple of years and we see that happening so they're going through this period I mean way investment of time in. And right Hispanics. And comparing that to some of the others at the other -- companies. This stock price I thought this is it that said Exxon is it's up what 75% but it's not as much as there's a couple of days and has made several. Which aspect and nearest US rival Barack. About more more like fourteen -- and obviously -- -- Thanks actress Ali you -- come I'm will be back with more breaking views to mark.

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Breakingviews: Exxon's buyback flub

Thursday, August 01, 2013 - 03:17