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Why an Earnings Beat is Likely for ExxonMobil (XOM) in Q3
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Oil giant ExxonMobil Corporation (XOM - Free Report) is set to report third-quarter 2017 results on Oct 27, before the opening bell.
Last quarter, the company posted a negative earnings surprise of 6.02%. However, ExxonMobildelivered an average positive earnings surprise of 8.94% for the last four quarters.
Which Way Are the Estimates Headed?
Let’s take a look at the estimate revision trend in order to get a clear picture of analyst opinion on the stock before the earnings release.
The Zacks Consensus Estimate of 87 cents for third-quarter earnings has been revised upward over the last 30 days, with three firms being bullish and one firm taking a bearish stance. The consensus estimate reflects a year-over-year improvement of about 38.5%.
Analysts polled by Zacks expect revenues of $63,916 million for the third quarter, up 9% from the year-ago quarter.
Why a Likely Positive Surprise?
Our proven model shows that ExxonMobil is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: ExxonMobil’s Earnings ESP is +1.78%. A favorable ESP serves as a meaningful and leading indicator of a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: ExxonMobil currently has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 has a significantly higher chance of beating earnings estimates.
Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of ExxonMobil’s Zacks Rank #3 and +1.78% ESP makes us reasonably optimistic of an earnings beat.
What’s Driving the Better-than-Expected Earnings?
The Zacks Consensus Estimate for earnings after tax from ExxonMobil’s non-U.S upstream operations stands at $1,874 million, higher than $1,367 million reported in the prior quarter and $1,097 million in the year-ago quarter.
Also, for upstream operations in the domestic region, the Zacks Consensus Estimate for after-tax loss stands at $159 million, significantly narrower than the loss of $183 million and $477 million reported in the preceding quarter and year-ago quarter, respectively.
Investors should know that the Zacks Consensus Estimate for oil and natural gas liquid production outside the United States stands at 2,346 thousand barrels per day (mbd), higher than 2,269 mbd and 2,211 mbd in second-quarter 2017 and third-quarter 2016, respectively.
Also, the Zacks Consensus Estimate for oil and natural gas liquid production in the United States is pegged at 513 mbd, considerably higher than 484 mbd recorded in third-quarter 2016.
Hence, higher expected production amid favorable oil pricing scenario should support the company’s upstream business.
Q3 Price Outperformance
During the quarter, ExxonMobil has rallied 1.6%, underperforming the industry’s 9.6% gain.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Noble Midstream Partners LP , headquartered in Houston, TX, has diversified energy infrastructure properties. The company has an Earnings ESP of +1.91% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tesoro Corporation , based in San Antonio, TX, is a leading refining player. The company has an Earnings ESP of +5.02% and a Zacks Rank #3.
Gulfport Energy Corporation (GPOR - Free Report) , headquartered in Oklahoma City, OK, is an upstream energy player. The company has an Earnings ESP of +0.97% and a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Why an Earnings Beat is Likely for ExxonMobil (XOM) in Q3
Oil giant ExxonMobil Corporation (XOM - Free Report) is set to report third-quarter 2017 results on Oct 27, before the opening bell.
Last quarter, the company posted a negative earnings surprise of 6.02%. However, ExxonMobildelivered an average positive earnings surprise of 8.94% for the last four quarters.
Which Way Are the Estimates Headed?
Let’s take a look at the estimate revision trend in order to get a clear picture of analyst opinion on the stock before the earnings release.
The Zacks Consensus Estimate of 87 cents for third-quarter earnings has been revised upward over the last 30 days, with three firms being bullish and one firm taking a bearish stance. The consensus estimate reflects a year-over-year improvement of about 38.5%.
Analysts polled by Zacks expect revenues of $63,916 million for the third quarter, up 9% from the year-ago quarter.
Why a Likely Positive Surprise?
Our proven model shows that ExxonMobil is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: ExxonMobil’s Earnings ESP is +1.78%. A favorable ESP serves as a meaningful and leading indicator of a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: ExxonMobil currently has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 has a significantly higher chance of beating earnings estimates.
Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of ExxonMobil’s Zacks Rank #3 and +1.78% ESP makes us reasonably optimistic of an earnings beat.
What’s Driving the Better-than-Expected Earnings?
The Zacks Consensus Estimate for earnings after tax from ExxonMobil’s non-U.S upstream operations stands at $1,874 million, higher than $1,367 million reported in the prior quarter and $1,097 million in the year-ago quarter.
Also, for upstream operations in the domestic region, the Zacks Consensus Estimate for after-tax loss stands at $159 million, significantly narrower than the loss of $183 million and $477 million reported in the preceding quarter and year-ago quarter, respectively.
Investors should know that the Zacks Consensus Estimate for oil and natural gas liquid production outside the United States stands at 2,346 thousand barrels per day (mbd), higher than 2,269 mbd and 2,211 mbd in second-quarter 2017 and third-quarter 2016, respectively.
Also, the Zacks Consensus Estimate for oil and natural gas liquid production in the United States is pegged at 513 mbd, considerably higher than 484 mbd recorded in third-quarter 2016.
Hence, higher expected production amid favorable oil pricing scenario should support the company’s upstream business.
Q3 Price Outperformance
During the quarter, ExxonMobil has rallied 1.6%, underperforming the industry’s 9.6% gain.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Noble Midstream Partners LP , headquartered in Houston, TX, has diversified energy infrastructure properties. The company has an Earnings ESP of +1.91% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tesoro Corporation , based in San Antonio, TX, is a leading refining player. The company has an Earnings ESP of +5.02% and a Zacks Rank #3.
Gulfport Energy Corporation (GPOR - Free Report) , headquartered in Oklahoma City, OK, is an upstream energy player. The company has an Earnings ESP of +0.97% and a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>