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ExxonMobil (XOM) Projects $9.6B Operating Profit for Q1
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Exxon Mobil Corporation (XOM - Free Report) indicated that first-quarter 2023 operating profits could have declined from last year’s peak levels due to the drop in oil and gas prices.
The company expects an operational profit of $9.6 billion for the first quarter, down from the $12.8 billion net profit reported in the fourth quarter of 2022.
ExxonMobil signaled slightly weaker profits for the first quarter. The company expects declining oil and gas prices to lower earnings of its production business. The oil major expects its upstream business to lower earnings by $1-$1.8 billion in the first quarter, sequentially, as crude prices fell.
The decline in natural gas prices is likely to have negatively impacted the upstream business’s profits by $400-$800 million, while lower crude oil prices accounted for $0.6-$1 billion. The company could face $1.8-$2.2 billion in upstream mark-to-market derivative losses.
ExxonMobil stated that the rising refining margins could result in a $200-million sequential decline in earnings or remain flat sequentially. The value of unsettled derivatives is likely to have been positively impacted by $300-$700 million. Moreover, the margins in the company’s chemical units could result in $100 million of sequential improvement/decline in earnings in the first quarter.
Improving fuel demand and strong 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 $38.6 billion in earnings in the first quarter of this year, suggesting an improvement from $36.5 billion recorded in the prior-year quarter.
Price Performance
Shares of ExxonMobil have outperformed the industry in the past six months. The stock has gained 12.7% compared with the industry’s 11.5% growth.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ExxonMobil currently carries a Zack Rank #3 (Hold).
Cactus, Inc. (WHD - Free Report) reported fourth-quarter adjusted earnings of 57 cents per share, beating the Zacks Consensus Estimate of 51 cents. Strong quarterly earnings were primarily driven by increased drilling activity by customers, offset partially by higher total expenses.
At the fourth-quarter end, Cactus had cash and cash equivalents of $344.5 million, which can provide it with immense financial flexibility. Cactus had no bank debt outstanding as of Dec 31, 2022.
Marathon Petroleum Corporation’s (MPC - Free Report) adjusted earnings per share of $6.65 comfortably beat the Zacks Consensus Estimate of $5.54. The bottom line was favorably impacted by the stronger-than-expected performance of its key Refining & Marketing segment.
In the fourth quarter, MPC repurchased $1.8 billion of shares and another $700 million worth of shares from the start of this year till Jan 27. Marathon Petroleum, which gave an additional $5 billion share repurchase approval, currently has a remaining authorization of $7.6 billion.
Phillips 66 (PSX - Free Report) reported fourth-quarter 2022 adjusted earnings of $4 per share, missing the Zacks Consensus Estimate of $4.34. Lower-than-expected quarterly earnings were driven by lower contributions from the Chemicals segment. The negatives were partially offset by strong refining margins worldwide.
Phillips 66 received approval from the board of directors to hike its dividend. The new quarterly dividend of $1.05 per share reflects an increase of 8.2% from the previous quarter’s 97 cents and a 14% hike from the year-ago quarter’s 92 cents.
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ExxonMobil (XOM) Projects $9.6B Operating Profit for Q1
Exxon Mobil Corporation (XOM - Free Report) indicated that first-quarter 2023 operating profits could have declined from last year’s peak levels due to the drop in oil and gas prices.
The company expects an operational profit of $9.6 billion for the first quarter, down from the $12.8 billion net profit reported in the fourth quarter of 2022.
ExxonMobil signaled slightly weaker profits for the first quarter. The company expects declining oil and gas prices to lower earnings of its production business. The oil major expects its upstream business to lower earnings by $1-$1.8 billion in the first quarter, sequentially, as crude prices fell.
The decline in natural gas prices is likely to have negatively impacted the upstream business’s profits by $400-$800 million, while lower crude oil prices accounted for $0.6-$1 billion. The company could face $1.8-$2.2 billion in upstream mark-to-market derivative losses.
ExxonMobil stated that the rising refining margins could result in a $200-million sequential decline in earnings or remain flat sequentially. The value of unsettled derivatives is likely to have been positively impacted by $300-$700 million. Moreover, the margins in the company’s chemical units could result in $100 million of sequential improvement/decline in earnings in the first quarter.
Improving fuel demand and strong 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 $38.6 billion in earnings in the first quarter of this year, suggesting an improvement from $36.5 billion recorded in the prior-year quarter.
Price Performance
Shares of ExxonMobil have outperformed the industry in the past six months. The stock has gained 12.7% compared with the industry’s 11.5% growth.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ExxonMobil currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently buy a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cactus, Inc. (WHD - Free Report) reported fourth-quarter adjusted earnings of 57 cents per share, beating the Zacks Consensus Estimate of 51 cents. Strong quarterly earnings were primarily driven by increased drilling activity by customers, offset partially by higher total expenses.
At the fourth-quarter end, Cactus had cash and cash equivalents of $344.5 million, which can provide it with immense financial flexibility. Cactus had no bank debt outstanding as of Dec 31, 2022.
Marathon Petroleum Corporation’s (MPC - Free Report) adjusted earnings per share of $6.65 comfortably beat the Zacks Consensus Estimate of $5.54. The bottom line was favorably impacted by the stronger-than-expected performance of its key Refining & Marketing segment.
In the fourth quarter, MPC repurchased $1.8 billion of shares and another $700 million worth of shares from the start of this year till Jan 27. Marathon Petroleum, which gave an additional $5 billion share repurchase approval, currently has a remaining authorization of $7.6 billion.
Phillips 66 (PSX - Free Report) reported fourth-quarter 2022 adjusted earnings of $4 per share, missing the Zacks Consensus Estimate of $4.34. Lower-than-expected quarterly earnings were driven by lower contributions from the Chemicals segment. The negatives were partially offset by strong refining margins worldwide.
Phillips 66 received approval from the board of directors to hike its dividend. The new quarterly dividend of $1.05 per share reflects an increase of 8.2% from the previous quarter’s 97 cents and a 14% hike from the year-ago quarter’s 92 cents.