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ExxonMobil (XOM) Q2 Earnings: A Surprise in the Cards?
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Oil giant ExxonMobil Corporation (XOM - Free Report) is expected to report second-quarter 2016 earnings on Jul 29, 2016.
Last quarter, the company delivered a 53.57% positive earnings surprise. Moreover, ExxonMobil posted an average positive earnings surprise of 15.46% over the last four quarters. Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
ExxonMobil is in excellent financial health and has an AAA credit profile. The company’s free cash flow generation remains strong and it regularly rewards its shareholders. It has steadily raised its dividend, which currently stands at an annualized $2.92 per share. The company also has a solid share buyback program in place. We expect the company to maintain its growth momentum in the soon-to-be-reported quarter.
The company boasts diversified operations across the world with several new projects expected to come online through 2016. Though ExxonMobil functions in all corners of the globe, its main areas of focus for new volumes in the coming years are the U.S., Canada, Kazakhstan, West Africa, Australia, Russia, Angola and Iraq. The company explores for unconventional natural gas across North America as well as offshore regions, including the Gulf of Mexico. Notably, ExxonMobil achieved success in the exploration of a well in offshore Tanzania, where it came across massive amounts of high quality recoverable gas. Revenues from these projects are likely to contribute to second-quarter earnings.
ExxonMobil’s strength lies in its balanced operations, strong financial flexibility and continuous efforts to improve efficiency and cost control. The company’s initiatives to build an unconventional resource portfolio both in North America and overseas is aimed at increasing production through a wide exposure to large energy resources with long reserve life and low field declines.
Earnings Whispers
Our proven model does not conclusively show that ExxonMobil is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at 0.00%.
Zacks Rank: ExxonMobil currently holds a Zacks Rank #2 (Buy). Though a favorable Zacks Rank increases the predictive power of ESP, an Earnings ESP of 0.00% makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions..
Stocks to Consider
Here are some companies from the same space which according to our model have the right combination of elements to post an earnings beat this quarter:
Spectra Energy Corp. (SE - Free Report) has an Earnings ESP of +16.00% and a Zacks Rank #2. The company is slated to release earnings on Aug 3.
EOG Resources, Inc. (EOG - Free Report) has an Earnings ESP of +2.00% and a Zacks Rank #2. The company is slated to release earnings on Aug 4.
Hess Corporation (HES - Free Report) has an Earnings ESP of +2.38% and a Zacks Rank #3. The company is slated to release earnings on Jul 27.
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ExxonMobil (XOM) Q2 Earnings: A Surprise in the Cards?
Oil giant ExxonMobil Corporation (XOM - Free Report) is expected to report second-quarter 2016 earnings on Jul 29, 2016.
Last quarter, the company delivered a 53.57% positive earnings surprise. Moreover, ExxonMobil posted an average positive earnings surprise of 15.46% over the last four quarters. Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
ExxonMobil is in excellent financial health and has an AAA credit profile. The company’s free cash flow generation remains strong and it regularly rewards its shareholders. It has steadily raised its dividend, which currently stands at an annualized $2.92 per share. The company also has a solid share buyback program in place. We expect the company to maintain its growth momentum in the soon-to-be-reported quarter.
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The company boasts diversified operations across the world with several new projects expected to come online through 2016. Though ExxonMobil functions in all corners of the globe, its main areas of focus for new volumes in the coming years are the U.S., Canada, Kazakhstan, West Africa, Australia, Russia, Angola and Iraq. The company explores for unconventional natural gas across North America as well as offshore regions, including the Gulf of Mexico. Notably, ExxonMobil achieved success in the exploration of a well in offshore Tanzania, where it came across massive amounts of high quality recoverable gas. Revenues from these projects are likely to contribute to second-quarter earnings.
ExxonMobil’s strength lies in its balanced operations, strong financial flexibility and continuous efforts to improve efficiency and cost control. The company’s initiatives to build an unconventional resource portfolio both in North America and overseas is aimed at increasing production through a wide exposure to large energy resources with long reserve life and low field declines.
Earnings Whispers
Our proven model does not conclusively show that ExxonMobil is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at 0.00%.
Zacks Rank: ExxonMobil currently holds a Zacks Rank #2 (Buy). Though a favorable Zacks Rank increases the predictive power of ESP, an Earnings ESP of 0.00% makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions..
Stocks to Consider
Here are some companies from the same space which according to our model have the right combination of elements to post an earnings beat this quarter:
Spectra Energy Corp. (SE - Free Report) has an Earnings ESP of +16.00% and a Zacks Rank #2. The company is slated to release earnings on Aug 3.
EOG Resources, Inc. (EOG - Free Report) has an Earnings ESP of +2.00% and a Zacks Rank #2. The company is slated to release earnings on Aug 4.
Hess Corporation (HES - Free Report) has an Earnings ESP of +2.38% and a Zacks Rank #3. The company is slated to release earnings on Jul 27.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>