Energy Business

What to Expect From Exxon Earnings

Exxon Mobil Corp. (NYSE: XOM) is set to release its most recent earnings report before the markets open on Friday. This is a strong company from a financial standpoint, and even though slumping oil prices have weighed on it over the past year, the stock is currently on the higher end of its 52-week range.

The consensus estimates from Thomson Reuters are $0.64 in earnings per share (EPS) on $60.23 billion in revenue for the quarter. In the same period of last year, Exxon posted EPS of $1.00 and $74.11 billion in revenue.

Just recently, Exxon won a bidding war with Oil Search for the right to acquire InterOil Corp. (NYSE: IOC). In its announcement, Exxon said the transaction is worth more than $2.5 billion. The world’s largest publicly traded oil and gas producer paid $45 a share for InterOil and agreed to pay an additional $7.07 in cash per share for every trillion cubic feet discovered in the Elk-Antelope field, up to a total of 10 trillion cubic feet. The contingent resource payment, as it is called, is not transferable and will not be listed on any exchange. InterOil shares traded both in New York and Australia.

Exxon remains a top Wall Street energy pick. This company is an energy sector play that the Merrill Lynch analysts are very positive on long term, as the overall corporate strength of the massive integrated giant plays a significant part in the company’s usually solid earnings reporting pattern and in maintaining dividend coverage.

The company’s global downstream chemical segment plays a huge part for Exxon. It may be a part that many on Wall Street don’t fully appreciate, as the segment contributes an estimated 16% of overall total revenue. Some very solid reasons for adding the stock to a long-term growth portfolio are that the company has consistently demonstrated disciplined investing, operational excellence and technological innovation.

Prior to the release of the earnings report a few analysts weighed in on Exxon:

  • Barclays reiterated an Equal Weight.
  • Goldman Sachs has a Buy rating with a $102 price target.
  • HSBC has a Neutral rating with an $88.50 price target.
  • Jefferies reiterated a Hold rating.
  • JPMorgan has a Neutral rating with a $95 price target.

Excluding Thursday’s move, Exxon had outperformed the broad markets, with the stock up nearly 20% year to date. Over the past 52 weeks, the stock is up only 14%.

Share of Exxon were trading down 0.8% at $90.15 on Thursday, with a consensus analyst price target of $90.42 and a 52-week trading range of $66.55 to $95.55.

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