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What Exxon Mobil (XOM) Estimates Say About Its Recent Performance
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Exxon Mobil (XOM - Free Report) reported strong results in the last quarter, with earnings growing 218% from the March quarter of 2021 on top of sales that grew 53%. However, while sales beat the Zacks Consensus Estimate by 1.8%, earnings missed by 8.0%.
Analyst estimates are a good indication of how a stock is likely to perform in any given quarter. So when a company significantly underperforms or overperforms analyst estimates, there is usually a reaction from investors, reflected in the share price.
But the top- and bottom-line surprises don’t tell the whole story.
As noted, last quarter Exxon Mobil missed earnings estimates by 8.0%. However, after-tax earnings from Upstream operations beat estimates by 8.2%, after-tax earnings from Downstream operations missed estimates by 63.2% while the Chemical business missed estimates by 9.5%.
Drilling down still further, we find that both the U.S. and non-U.S. segments of the upstream business beat estimates (by 6% and 9%, respectively).
Also, while the U.S. downstream business beat analyst estimates by 27.1%, the non-U.S. downstream business missed by 197.9%.
In the Chemical business, both U.S. and non-U.S. segments missed estimates, but the U.S. segment missed by 4.9% while the non-U.S. business missed by 15.7%.
From the above, we can say that the company easily outperformed the estimates for the upstream business. But the downstream business proved harder to predict, which may have been for a number of reasons. The same can be said of the non-U.S. chemicals business.
Now let’s take a closer look at the positive revenue surprise of 1.8%.
We find that the total oil equivalent production missed analyst estimates by 4.4%. Net production of crude oil, natural gas liquids, bitumen and synthetic oil missed estimates by 6.6%. Natural gas production available for sale also missed, but by less than 1%.
Natural gas production surprises by region were as follows: U.S. +2.9%, Canada -1.1%, Europe +8.6%, Africa +22.4%, Asia -3.7% and Australia/Oceania +0.48%.
Analyst estimates on the Asia business were most significantly off the mark. And since this is a relatively big segment, it had a big impact on the overall natural gas estimate. The Africa business posted a big surprise, but it was off a small base, so didn’t have much of an impact. Europe’s surprise is substantial but understandable given the prevailing geopolitical conditions.
Conclusion
Overall, we can say that analyst estimates for the last quarter were more accurate with respect to the U.S. business although they were on the conservative side. Estimates for the international business were generally off the mark.
This may have been because the quarter’s results were driven by a combination of rising prices and slightly lower volumes (impacted by unfavorable weather conditions).
Zacks Rank
Exxon Mobil shares carry a Zacks Rank #2 (Buy). The Oil and Gas - Integrated – International industry to which it belongs is currently in the top 28% of Zacks-classified industries. So this is an industry worth investing in at this time. Some other stocks in this industry that may also be worth considering are Zacks #1 (Strong Buy) ranked Vista Oil & Gas (VIST - Free Report) and YPF Sociedad Anonima (YPF - Free Report) , as well as #2 ranked Chevron (CVX - Free Report) .
Price Performance Year to Date
Image Source: Zacks Investment Research
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What Exxon Mobil (XOM) Estimates Say About Its Recent Performance
Exxon Mobil (XOM - Free Report) reported strong results in the last quarter, with earnings growing 218% from the March quarter of 2021 on top of sales that grew 53%. However, while sales beat the Zacks Consensus Estimate by 1.8%, earnings missed by 8.0%.
Analyst estimates are a good indication of how a stock is likely to perform in any given quarter. So when a company significantly underperforms or overperforms analyst estimates, there is usually a reaction from investors, reflected in the share price.
But the top- and bottom-line surprises don’t tell the whole story.
As noted, last quarter Exxon Mobil missed earnings estimates by 8.0%. However, after-tax earnings from Upstream operations beat estimates by 8.2%, after-tax earnings from Downstream operations missed estimates by 63.2% while the Chemical business missed estimates by 9.5%.
Drilling down still further, we find that both the U.S. and non-U.S. segments of the upstream business beat estimates (by 6% and 9%, respectively).
Also, while the U.S. downstream business beat analyst estimates by 27.1%, the non-U.S. downstream business missed by 197.9%.
In the Chemical business, both U.S. and non-U.S. segments missed estimates, but the U.S. segment missed by 4.9% while the non-U.S. business missed by 15.7%.
From the above, we can say that the company easily outperformed the estimates for the upstream business. But the downstream business proved harder to predict, which may have been for a number of reasons. The same can be said of the non-U.S. chemicals business.
Now let’s take a closer look at the positive revenue surprise of 1.8%.
We find that the total oil equivalent production missed analyst estimates by 4.4%. Net production of crude oil, natural gas liquids, bitumen and synthetic oil missed estimates by 6.6%. Natural gas production available for sale also missed, but by less than 1%.
Natural gas production surprises by region were as follows: U.S. +2.9%, Canada -1.1%, Europe +8.6%, Africa +22.4%, Asia -3.7% and Australia/Oceania +0.48%.
Analyst estimates on the Asia business were most significantly off the mark. And since this is a relatively big segment, it had a big impact on the overall natural gas estimate. The Africa business posted a big surprise, but it was off a small base, so didn’t have much of an impact. Europe’s surprise is substantial but understandable given the prevailing geopolitical conditions.
Conclusion
Overall, we can say that analyst estimates for the last quarter were more accurate with respect to the U.S. business although they were on the conservative side. Estimates for the international business were generally off the mark.
This may have been because the quarter’s results were driven by a combination of rising prices and slightly lower volumes (impacted by unfavorable weather conditions).
Zacks Rank
Exxon Mobil shares carry a Zacks Rank #2 (Buy). The Oil and Gas - Integrated – International industry to which it belongs is currently in the top 28% of Zacks-classified industries. So this is an industry worth investing in at this time. Some other stocks in this industry that may also be worth considering are Zacks #1 (Strong Buy) ranked Vista Oil & Gas (VIST - Free Report) and YPF Sociedad Anonima (YPF - Free Report) , as well as #2 ranked Chevron (CVX - Free Report) .
Price Performance Year to Date
Image Source: Zacks Investment Research