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ExxonMobil (XOM) Gears Up for Q3 Earnings: What's in the Offing?

Zacks Equity Research
·3-min read

Exxon Mobil Corporation XOM is set to report third-quarter 2021 results on Oct 29, before the opening bell.

In the last reported quarter, the leading integrated energy company reported earnings of $1.10 per share, beating the Zacks Consensus Estimate of $1.02 owing to improved realized oil and natural gas prices as well as higher chemical margins. ExxonMobil beat bottom-line estimates in the prior four reported quarters, the average surprise being 63.4%. 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 and EPS Surprise

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

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Let’s see how things have shaped up prior to this announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate for third-quarter earnings per share of $1.57 has witnessed two downward revisions and six upward revisions in the past 30 days. The estimated figure suggests an improvement of 972.2% from the prior-year reported number.

The consensus estimate for third-quarter revenues of $73.3 billion indicates a 58.7% jump from the year-ago reported figure.

Factors to Consider

ExxonMobil recently expressed optimism over the significantly higher oil and gas prices contributing to its third-quarter 2021 upstream earnings. The integrated energy giant is expecting its upstream business to generate a maximum of $1.5 billion more earnings in the third quarter sequentially. The company also projects a significant sequential improvement in its downstream business – a key operating unit.

The company projects operating results in the third quarter from the oil and liquids businesses to improve $200 million to $600 million compared to the June quarter of 2021, thanks to an uptick in oil prices. The improvement in natural gas prices is likely to have contributed another $500 million to $900 million to upstream business profits, as estimated by the energy major. The rolling out of coronavirus vaccines, which led to expectations of a strong rebound in economies, primarily helped commodity prices move north in the September quarter of 2021.

ExxonMobil estimates $500 million to $700 million of sequential improvement in earnings from the downstream business in the September quarter, thanks to improved refining margins. However, the company estimates profits to decrease $200 million to $400 million from the chemical business due to an unhealthy chemicals margin.

Earnings Whispers

Our proven model does not indicate 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: The company’s Earnings ESP is 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.57 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: ExxonMobil currently sports a Zacks Rank #1.

Stocks That Warrant a Look

Here are some companies from the Energy space that you may also 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:

EQT Corporation EQT has an Earnings ESP of +4.29% and is a Zacks #2 Ranked player. The company is scheduled to release third-quarter results on Oct 27. You can see the complete list of today’s Zacks #1 Rank stocks here.

Royal Dutch Shell plc (RDS.A) has an Earnings ESP of +4.13% and a Zacks Rank of 1. It is scheduled to report third-quarter results on Oct 28.

Callon Petroleum Company CPE has an Earnings ESP of +0.50% and a Zacks Rank #1. The firm is scheduled to release third-quarter earnings on Nov 3.


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Exxon Mobil Corporation (XOM) : Free Stock Analysis Report

Royal Dutch Shell PLC (RDS.A) : Free Stock Analysis Report

EQT Corporation (EQT) : Free Stock Analysis Report

Callon Petroleum Company (CPE) : Free Stock Analysis Report

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