Exxon’s (XOM) shares are up about 40% over the last year and trade near their high of $86 and change. But, in American lives, there are no second acts. Or, so said F. Scott Fitzgerald.
But, $71 oil is the stuff that dreams are made of, at least at Exxon. The company announces earnings on July 26, and, although they will be strong, the focus should be on how the second half looks. If oil stays high, it should be spectacular.
Based on Exxon’s performance in the third quarter of last year, when oil also spiked above $70, Exxon had revenue of $99.6 billion and operating income $18.8 billion. The third quarter of 2007 could be better. Revenue could top $100 billion and operating income could approach $20 billion.
Skeptics would argue that the Exxon Express cannot run forever, but the next year or two could be records on top of records. OPEC shows no signs of increasing output. Venezuela and Nigeria present problems that could keep output tight. And, unrest in the Middle East will almost certainly continue indefinitely.
It is the Exxon decade, whether consumers and businesses that use oil like it or not.
Douglas A. McIntyre can be reached at [email protected].
Top Gaining Stocks
Top Losing Stocks