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ExxonMobil (XOM) Projects $15.4B Operating Profits for Q4
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Exxon Mobil Corporation (XOM - Free Report) indicated that the escalating margins in fuel and crude sales could contribute to a record profit in 2022.
According to the preliminary results, 2022 was ExxonMobil’s best financial year, with profits of $58 billion. The company expects an operational profit of $15.4 billion for the fourth quarter.
Despite a bumper year, ExxonMobil signaled slightly weaker profits in the fourth 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 $3.3-$4.1 billion in the fourth quarter, sequentially, as crude prices fell.
The decline in natural gas prices is likely to have negatively impacted the upstream business’s profits by $2-$2.4 billion, while lower crude oil prices accounted for $1.3-$1.7 billion. The losses were offset by $1.3-$1.5 billion in upstream mark-to-market derivative gains.
ExxonMobil stated that the rising refining margins could result in $100 million of sequential improvement/decline in earnings in the fourth quarter. The value of unsettled derivatives may have been negatively impacted by $0.9-$1.1 billion.
The margins in the company’s chemical units are expected to have been negatively impacted by $400-$600 million in the fourth quarter. ExxonMobil indicated impairments of $500 million as it divests unwanted assets to focus on more profitable projects.
Improving fuel demand and higher commodity prices are likely to have aided the energy businesses in the fourth quarter. In 2022, skyrocketing commodity prices generated record earnings among all oil majors. ExxonMobil benefited the most after doubling down on oil during the pandemic when European peers shifted to renewable projects.
Price Performance
Shares of ExxonMobil have outperformed the industry in the past six months. The stock has gained 28.2% compared with the industry’s 23.5% growth.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ExxonMobil currently carries a Zack Rank #3 (Hold).
ProPetro Holding Corp. (PUMP - Free Report) is an oilfield service provider operating primarily in the Permian Basin over west Texas and New Mexico. PUMP’s third-quarter 2022 earnings per share of 38 cents beat the Zacks Consensus Estimate of 36 cents.
PUMP is expected to see an earnings rise of 145.3% in 2022. As of Sept 30, ProPetro had $43.2 million in cash and cash equivalents, and total liquidity of $155 million. ProPetro’s balance sheet is debt-free, which provides a potential lifeline amid the difficult operating environment. The steep cutbacks to its capital budget further strengthen its financial position.
Liberty Energy Inc. (LBRT - Free Report) offers hydraulic fracturing services to onshore upstream energy companies across multiple basins in North America. LBRT’s third-quarter 2022 earnings per share of 78 cents beat the Zacks Consensus Estimate of 63 cents.
Liberty is expected to see an earnings surge of 298% in 2022. As of Sep 30, 2022, Liberty had $298 million of available liquidity, including $24 million cash on hand and supported by the revolving credit facility. LBRT’s debt-to-capitalization stands at just 15.2% compared with most peers hugely burdened with debts.
Helmerich & Payne Inc. (HP - Free Report) is a major land and offshore drilling contractor in the western hemisphere, having the youngest and most efficient drilling fleet. HP’s third-quarter fiscal 2022 adjusted profit of 27 cents per share beat the Zacks Consensus Estimate of 5 cents.
Helmerich & Payne is expected to see an earnings surge of 277.8% in 2022. HP boasts a strong balance sheet, carrying $542.3 million in long-term debt. The company’s debt-to-capitalization stands at just 16.6% compared with many of its peers that are hugely burdened with debts.
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ExxonMobil (XOM) Projects $15.4B Operating Profits for Q4
Exxon Mobil Corporation (XOM - Free Report) indicated that the escalating margins in fuel and crude sales could contribute to a record profit in 2022.
According to the preliminary results, 2022 was ExxonMobil’s best financial year, with profits of $58 billion. The company expects an operational profit of $15.4 billion for the fourth quarter.
Despite a bumper year, ExxonMobil signaled slightly weaker profits in the fourth 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 $3.3-$4.1 billion in the fourth quarter, sequentially, as crude prices fell.
The decline in natural gas prices is likely to have negatively impacted the upstream business’s profits by $2-$2.4 billion, while lower crude oil prices accounted for $1.3-$1.7 billion. The losses were offset by $1.3-$1.5 billion in upstream mark-to-market derivative gains.
ExxonMobil stated that the rising refining margins could result in $100 million of sequential improvement/decline in earnings in the fourth quarter. The value of unsettled derivatives may have been negatively impacted by $0.9-$1.1 billion.
The margins in the company’s chemical units are expected to have been negatively impacted by $400-$600 million in the fourth quarter. ExxonMobil indicated impairments of $500 million as it divests unwanted assets to focus on more profitable projects.
Improving fuel demand and higher commodity prices are likely to have aided the energy businesses in the fourth quarter. In 2022, skyrocketing commodity prices generated record earnings among all oil majors. ExxonMobil benefited the most after doubling down on oil during the pandemic when European peers shifted to renewable projects.
Price Performance
Shares of ExxonMobil have outperformed the industry in the past six months. The stock has gained 28.2% compared with the industry’s 23.5% 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 flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ProPetro Holding Corp. (PUMP - Free Report) is an oilfield service provider operating primarily in the Permian Basin over west Texas and New Mexico. PUMP’s third-quarter 2022 earnings per share of 38 cents beat the Zacks Consensus Estimate of 36 cents.
PUMP is expected to see an earnings rise of 145.3% in 2022. As of Sept 30, ProPetro had $43.2 million in cash and cash equivalents, and total liquidity of $155 million. ProPetro’s balance sheet is debt-free, which provides a potential lifeline amid the difficult operating environment. The steep cutbacks to its capital budget further strengthen its financial position.
Liberty Energy Inc. (LBRT - Free Report) offers hydraulic fracturing services to onshore upstream energy companies across multiple basins in North America. LBRT’s third-quarter 2022 earnings per share of 78 cents beat the Zacks Consensus Estimate of 63 cents.
Liberty is expected to see an earnings surge of 298% in 2022. As of Sep 30, 2022, Liberty had $298 million of available liquidity, including $24 million cash on hand and supported by the revolving credit facility. LBRT’s debt-to-capitalization stands at just 15.2% compared with most peers hugely burdened with debts.
Helmerich & Payne Inc. (HP - Free Report) is a major land and offshore drilling contractor in the western hemisphere, having the youngest and most efficient drilling fleet. HP’s third-quarter fiscal 2022 adjusted profit of 27 cents per share beat the Zacks Consensus Estimate of 5 cents.
Helmerich & Payne is expected to see an earnings surge of 277.8% in 2022. HP boasts a strong balance sheet, carrying $542.3 million in long-term debt. The company’s debt-to-capitalization stands at just 16.6% compared with many of its peers that are hugely burdened with debts.