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Will Higher Price Drive Q2 Earnings for ExxonMobil (XOM)?

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Exxon Mobil Corporation (XOM - Free Report) is set to report second-quarter 2022 results on Jul 29, before the opening bell.

In the last reported quarter, the integrated energy giant reported earnings per share of $2.07 (excluding identified items), missing the Zacks Consensus Estimate of $2.25 per share due to a decline in oil equivalent production. This was partially offset by higher commodity prices and improved refining margins.

In the trailing four quarters, ExxonMobil beat the Zacks Consensus Estimate for earnings thrice and missed the same once, delivering a surprise of 1.3%, on average. This is depicted in the graph below:

Exxon Mobil Corporation Price and EPS Surprise

 

Exxon Mobil Corporation Price and EPS Surprise

Exxon Mobil Corporation price-eps-surprise | Exxon Mobil Corporation Quote

Let’s delve into the factors that are anticipated to have influenced the energy giant’s performance in the June-end quarter.

Estimate Trend

The Zacks Consensus Estimate for ExxonMobil’s second-quarter earnings per share of $3.53 has witnessed six upward revisions and no downward movement in the past 30 days. The consensus estimate suggests a year-over-year increase of 221%.

The Zacks Consensus Estimate for the to-be-reported quarter’s revenues of $112.2 billion indicates a 65.6% improvement from the year-ago reported figure.

Earnings Whispers

Our proven model conclusively predicts an earnings beat for ExxonMobil this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: ExxonMobil has an Earnings ESP of +5.89%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: ExxonMobil currently carries a Zacks Rank #2.

Factors to Note

In the June-end quarter of this year, oil prices were much higher than the year-ago quarter. The significant rise in pricing occurred from Russia’s violent and unprovoked invasion of Ukraine. The spike in oil price was favorable for ExxonMobil’s exploration and production activities in the second quarter.

The Zacks Consensus Estimate for ExxonMobil’s daily production volumes is pegged at 3,710 million barrels of oil equivalent per day (MBoe/d), suggesting an improvement from 3,582 Mboe/d reported in the year-ago quarter. Thus, higher production and price are likely to have aided XOM’s upstream operations.

The demand for refined petroleum products improved drastically in the second quarter due to improved fuel consumption. The Zacks Consensus Estimate for ExxonMobil’s refinery throughput volumes in the United States is pegged at 1,650 million barrels per day (Mbbls/d), suggesting an improvement from 1,532 Mbbls/d reported in the year-ago quarter.

Hence, improving fuel demand is expected to have aided the company’s refining and processing businesses in the second quarter.

Other Stocks That Warrant a Look

Here are some other companies from the Energy space that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

Equinor ASA (EQNR - Free Report) has an Earnings ESP of +13.89% and is a Zacks #1 Ranked player at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Equinor is scheduled to release second-quarter results on Jul 27. The Zacks Consensus Estimate for EQNR’s quarterly earnings is pegged at $1.44 per share, suggesting a massive increase from the prior-year reported figure.

Suncor Energy, Inc. (SU - Free Report) has an Earnings ESP of +11.91% and is a Zacks #1 Ranked player at present.

Suncor Energy is scheduled to release second-quarter results on Jul 27. The Zacks Consensus Estimate for SU’s quarterly earnings is pegged at $1.74 per share, suggesting an increase of 346.2% from the prior-year reported figure.

Phillips 66 (PSX - Free Report) has an Earnings ESP of +8.38% and is a Zacks #1 Ranked player at present.

Phillips 66 is scheduled to release the second-quarter results on Jul 29. The Zacks Consensus Estimate for PSX’s quarterly earnings is pegged at $5.49 per share, suggesting a massive improvement from the prior-year reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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