Investors already braced for poor first-quarter earnings from major oil and gas companies next week will focus on how executives plan to save cash and whether they will cut dividends following the collapse in oil prices.
From Exxon Mobil to Royal Dutch Shell , companies have put projects on hold, slashed production in U.S. shale fields and reduced operations at refineries to deal with the double whammy of a drop in demand and a supply glut. Oilfield services providers Halliburton , Schlumberger and Baker Hughes have also already taken huge earnings hits in the first quarter.Oil company boards have historically refrained from cutting dividends during previous crises, resorting to measures such as borrowing money or offering discounted shares instead of cash.
Some investors, however, have called on them to break the dividend taboo instead, because debt levels are already high. But the results are only likely to be a prelude to a disastrous second quarter, when the full impact on fuel demand from travel restrictions on more than half of the world's population will be felt.
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