ExxonMobil (XOM): What's In Store This Earnings Season?
Zacks Investment Research | Oct 24, 2016 10:22PM ET
Oil giant ExxonMobil Corporation (NYSE:XOM) is expected to report third-quarter 2016 earnings on Oct 28, 2016, before the opening bell.
Last quarter, the company delivered a negative earnings surprise of 35.94%. Nonetheless, ExxonMobil posted an average positive earnings surprise of 8.95% over the last four quarters.
Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
ExxonMobil is the world’s best run integrated oil company based on its track record of high return on capital employed. However, the oil pricing environment is currently weaker than the comparable period 2015 and low commodity price might hurt the company’s upstream profit.
However, there has been a ramp up of drilling activities as more rigs are being employed in the U.S. In fact, Baker Hughes Inc. (NYSE:BHI) – the company’s data issued since 1944 is as an important yardstick for energy service providers in gauging the overall business environment of the oil and gas industry – recently declared the rig count for Sep 2016. In the U.S., the total number of rigs increased from the Aug 2016 count owing to a rise in the number of land rigs. This represents the fourth consecutive increase in the U.S. monthly rig count. The improved rig count might be a reflection of increased exploration and production operations, which in turn, is likely to ramp up production. We expect the improved output to drive profit in the company’s upstream business.
In the downstream business, however, the refining operations of the company is expected to display weakness as the retail price of gasoline – the end product of refiners – is lower than the year-ago comparable period.
Earnings Whispers
Our proven model does not conclusively show that ExxonMobil is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: ExxonMobil currently holds a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, an Earnings ESP of 0.00% makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
EXXON MOBIL CRP Price and EPS Surprise
Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.