Exxon Earnings Weakness Brings Back Warren Buffett Entry Level
Shares of Exxon Mobil reacted to its fourth-quarter earnings report early Thursday. Earnings were down 16%, mostly due to lower production and weaker-than-expected margins in its refining operations.
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Shares of Exxon Mobil Corp. (NYSE: XOM) reacted to its fourth-quarter earnings report early Thursday. The long and short of the matter is that earnings were down 16%, mostly due to lower production and weaker-than-expected margins in its refining operations.
The profit was still $8.35 billion, or $1.91 in earnings per share. Thomson Reuters had estimates of $1.92 per share, and the same quarter in 2012 showed earnings of $9.95 billion, or $2.20 per share. Revenue was down about 3% to $110.86 billion, which is short of the consensus estimate of about $114.5 billion. Note that many analysts make earnings per share predictions but they hardly make revenue predictions.
Exploration and production earnings were down 13% to just under $6.8 billion, and production was down 1.8%. Earnings from refining and marketing were down a sharp 48% to $916 million.
Still, Exxon managed to spend more than $3 billion buying back stock during the quarter, and it sees another $3 billion or so in the first quarter.
Exxon Mobil shares were down 0.5% at $95.11 on Wednesday, and the shares are indicated down 1.5% or so at $93.75 in early Thursday trading.
Despite a drop in earnings, think of the good news here — Exxon Mobil’s stock price is now getting closer to where it was when everyone found out that Warren Buffett had taken a huge stake.
Exxon Mobil’s share price was $93.22 before the Warren Buffett stake came to light in November, and the stock instantly popped to $95.27 on the news. Buffett may have bought this stock in the high $80s or low $90s, but this is still where the stock rallied from before.
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Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
