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ExxonMobil (XOM) Projects $9.3B Worth Upstream Earnings for Q1
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Exxon Mobil Corporation (XOM - Free Report) recently expressed optimism over the significantly higher oil and gas prices, contributing to its first-quarter 2022 upstream earnings.
ExxonMobil expects its upstream business to generate a maximum of $2.7 billion in additional earnings in the first quarter sequentially. The integrated energy giant expects operating profits from oil and gas operations of up to $9.3 billion, the highest for any quarter since 2017.
The company expects high oil and gas prices to boost earnings of its production business after Russia’s invasion of Ukraine pushed the commodity prices significantly higher. The company projects operating results in the first quarter from the oil and liquids businesses to improve $1.9-$2.3 billion compared with the December-end quarter of 2021, thanks to an uptick in oil prices. The improvement in natural gas prices is likely to have contributed up to $400 million to upstream business profits, as estimated by ExxonMobil.
ExxonMobil estimates $100-$300 million of sequential improvement in earnings from the downstream business in the first quarter, thanks to improved refining margins. Due to an unhealthy chemicals margin, the company estimates profits to decline $100-$300 million from the chemical business.
Impairments could weaken the final results of ExxonMobil’s Russia operations. In March, the company commenced the process of discontinuation of operations at Sakhalin-1 and planned to make no new investments in Russia. It has $4 billion in assets at risk of potential seizure. Notably, the move will impact oil production and earnings by 1-2%.
Improving fuel demand and the sharp rise in commodity prices are likely to have aided the energy businesses in the first quarter. Per Zacks Earnings Trends, the energy sector is on track to generate $33.3 billion in earnings in the first quarter of this year, suggesting an improvement from $32 billion recorded in the prior quarter.
Company Profile & Price Performance
Headquartered in Irving, TX, ExxonMobil is one of the leading integrated energy companies in the world.
Shares of ExxonMobil have outperformed the industry in the past six months. The XOM stock has gained 45.4% compared with the industry’s 31.8% growth.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
ExxonMobil currently carries a Zack Rank #2 (Buy).
Occidental Petroleum Corporation (OXY - Free Report) is an integrated oil and gas company with significant exploration and production exposure. At 2021-end, OXY’s preliminary worldwide proved reserves totaled 3.51 billion BOE compared with 2.91 billion Boe at the end of 2020.
Occidental’s earnings for 2022 are expected to increase 199.6% year over year. On Feb 10, 2022, the company’s board of directors authorized a new share repurchase program with a maximum limit of $3 billion and no set term limits, which supersedes the previously authorized share repurchase program.
Viper Energy Partners LP (VNOM - Free Report) generates high and steady royalty income from mineral interests in Eagle Ford and the Permian Basin. At 2021-end, VNOM estimated its proved reserves at 128 million barrels of oil equivalent (MMBoe), a year-over-year increase of 29%.
Viper Energy’s earnings for 2022 are expected to increase 169% year over year. VNOM was authorized by the board of directors of its general partner to make a cash distribution of 47 cents per common unit, payable Mar 11, 2022, to shareholders of record as of Mar 4, 2022. The metric increased almost 24% from the prior-quarter figure of 38 cents per common unit.
Equinor ASA (EQNR - Free Report) is one of the premier integrated energy companies in the world, with operations spreading across 30 countries. At 2021-end, EQNR had estimated proved reserves of 5.356 billion BOE.
Equinor’s earnings for 2022 are expected to increase 56.8% year over year. For 2022, Equinor announced the increase of the share buy-back program of up to $5 billion. Moreover, the energy major increased its quarterly dividend to 20 cents per share from the prior dividend of 18 cents.
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ExxonMobil (XOM) Projects $9.3B Worth Upstream Earnings for Q1
Exxon Mobil Corporation (XOM - Free Report) recently expressed optimism over the significantly higher oil and gas prices, contributing to its first-quarter 2022 upstream earnings.
ExxonMobil expects its upstream business to generate a maximum of $2.7 billion in additional earnings in the first quarter sequentially. The integrated energy giant expects operating profits from oil and gas operations of up to $9.3 billion, the highest for any quarter since 2017.
The company expects high oil and gas prices to boost earnings of its production business after Russia’s invasion of Ukraine pushed the commodity prices significantly higher. The company projects operating results in the first quarter from the oil and liquids businesses to improve $1.9-$2.3 billion compared with the December-end quarter of 2021, thanks to an uptick in oil prices. The improvement in natural gas prices is likely to have contributed up to $400 million to upstream business profits, as estimated by ExxonMobil.
ExxonMobil estimates $100-$300 million of sequential improvement in earnings from the downstream business in the first quarter, thanks to improved refining margins. Due to an unhealthy chemicals margin, the company estimates profits to decline $100-$300 million from the chemical business.
Impairments could weaken the final results of ExxonMobil’s Russia operations. In March, the company commenced the process of discontinuation of operations at Sakhalin-1 and planned to make no new investments in Russia. It has $4 billion in assets at risk of potential seizure. Notably, the move will impact oil production and earnings by 1-2%.
Improving fuel demand and the sharp rise in commodity prices are likely to have aided the energy businesses in the first quarter. Per Zacks Earnings Trends, the energy sector is on track to generate $33.3 billion in earnings in the first quarter of this year, suggesting an improvement from $32 billion recorded in the prior quarter.
Company Profile & Price Performance
Headquartered in Irving, TX, ExxonMobil is one of the leading integrated energy companies in the world.
Shares of ExxonMobil have outperformed the industry in the past six months. The XOM stock has gained 45.4% compared with the industry’s 31.8% growth.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
ExxonMobil currently carries a Zack Rank #2 (Buy).
Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Occidental Petroleum Corporation (OXY - Free Report) is an integrated oil and gas company with significant exploration and production exposure. At 2021-end, OXY’s preliminary worldwide proved reserves totaled 3.51 billion BOE compared with 2.91 billion Boe at the end of 2020.
Occidental’s earnings for 2022 are expected to increase 199.6% year over year. On Feb 10, 2022, the company’s board of directors authorized a new share repurchase program with a maximum limit of $3 billion and no set term limits, which supersedes the previously authorized share repurchase program.
Viper Energy Partners LP (VNOM - Free Report) generates high and steady royalty income from mineral interests in Eagle Ford and the Permian Basin. At 2021-end, VNOM estimated its proved reserves at 128 million barrels of oil equivalent (MMBoe), a year-over-year increase of 29%.
Viper Energy’s earnings for 2022 are expected to increase 169% year over year. VNOM was authorized by the board of directors of its general partner to make a cash distribution of 47 cents per common unit, payable Mar 11, 2022, to shareholders of record as of Mar 4, 2022. The metric increased almost 24% from the prior-quarter figure of 38 cents per common unit.
Equinor ASA (EQNR - Free Report) is one of the premier integrated energy companies in the world, with operations spreading across 30 countries. At 2021-end, EQNR had estimated proved reserves of 5.356 billion BOE.
Equinor’s earnings for 2022 are expected to increase 56.8% year over year. For 2022, Equinor announced the increase of the share buy-back program of up to $5 billion. Moreover, the energy major increased its quarterly dividend to 20 cents per share from the prior dividend of 18 cents.