We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ExxonMobil (XOM) to Report Q2 Earnings: Is a Beat in Store?
Read MoreHide Full Article
Exxon Mobil Corporation (XOM - Free Report) is scheduled to report second-quarter 2018 results, before the opening bell on Jul 27.
The company failed to beat the Zacks Consensus Estimate for earnings in three of the last four quarters, the average negative earnings surprise being 5.73%. Let’s see how things are shaping up prior to the announcement.
Which Way Are Estimates Headed?
Let’s take a look at the estimate revision trend to get a clear picture of what analysts expect from the earnings release.
The Zacks Consensus Estimate for second-quarter earnings of $1.24 has remained steady over the last 30 days. It reflects growth of almost 59% from the year-ago quarter.
The Zacks Consensus Estimate for revenues of $70.3 billion, reflecting 11.7% rise from the prior-year 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.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, stands at +1.29%. This is a very meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: ExxonMobil carries a Zacks Rank #3 (Hold), which when combined with a +1.29% ESP makes us confident about an earnings beat.
Note that stocks with Zacks Ranks #1, 2 or 3 have a significantly higher chance of beating earnings. Meanwhile, Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
ExxonMobil’s shares typically don’t represent the most aggressive way to play a rising oil price backdrop but the company’s bellwether status for the space, optimal integrated capital structure that has historically produced industry leading returns, and management’s track record of capex discipline across the commodity price cycle make it a relatively lower-risk energy sector play.
The balance sheet of ExxonMobil is one of the best in the industry — with the debt to capitalization ratio of 9.6% being significantly lower than the industry’s 26.6%. Notably, we expect the company to report healthy numbers from both the upstream and the downstream businesses.
Upstream Operation: The Zacks Consensus Estimate for earnings after tax from ExxonMobil’s non-U.S. upstream operations stands at $2,848 million, higher than $1,367 million in the year-ago quarter.
Also, for upstream operations in the domestic region, the Zacks Consensus Estimate for after-tax earnings stands at $252 million against the year-ago loss of $183 million.
Downstream Operation: For the downstream business, the Zacks Consensus Estimate for earnings after tax from ExxonMobil’s non-U.S. downstream operations is pegged at $852 million, higher than $621 million in the prior quarter.
For operations in the United States, the Zacks Consensus Estimate for after-tax earnings stands at $441 million, higher than $319 million in the January-to-March quarter and $347 million in the prior-year quarter.
Other Stocks That Warrant a Look
Other stocks in the energy sector that have a positive Earnings ESP and a favorable Zacks Rank are:
ConocoPhillips (COP - Free Report) , based in Houston, TX, is a leading upstream energy firm. The company has an Earnings ESP of +5.09% and a Zacks Rank #1.
Canadian Natural Resources Limited (CNQ - Free Report) , an upstream energy player, has an Earnings ESP of +1.42% and a Zacks Rank #1.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
ExxonMobil (XOM) to Report Q2 Earnings: Is a Beat in Store?
Exxon Mobil Corporation (XOM - Free Report) is scheduled to report second-quarter 2018 results, before the opening bell on Jul 27.
The company failed to beat the Zacks Consensus Estimate for earnings in three of the last four quarters, the average negative earnings surprise being 5.73%. Let’s see how things are shaping up prior to the announcement.
Which Way Are Estimates Headed?
Let’s take a look at the estimate revision trend to get a clear picture of what analysts expect from the earnings release.
The Zacks Consensus Estimate for second-quarter earnings of $1.24 has remained steady over the last 30 days. It reflects growth of almost 59% from the year-ago quarter.
The Zacks Consensus Estimate for revenues of $70.3 billion, reflecting 11.7% rise from the prior-year 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.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, stands at +1.29%. This is a very meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: ExxonMobil carries a Zacks Rank #3 (Hold), which when combined with a +1.29% ESP makes us confident about an earnings beat.
Note that stocks with Zacks Ranks #1, 2 or 3 have a significantly higher chance of beating earnings. Meanwhile, Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
Exxon Mobil Corporation Price and EPS Surprise
Exxon Mobil Corporation Price and EPS Surprise | Exxon Mobil Corporation Quote
What’s Driving the Better-Than-Expected Earnings?
ExxonMobil’s shares typically don’t represent the most aggressive way to play a rising oil price backdrop but the company’s bellwether status for the space, optimal integrated capital structure that has historically produced industry leading returns, and management’s track record of capex discipline across the commodity price cycle make it a relatively lower-risk energy sector play.
The balance sheet of ExxonMobil is one of the best in the industry — with the debt to capitalization ratio of 9.6% being significantly lower than the industry’s 26.6%. Notably, we expect the company to report healthy numbers from both the upstream and the downstream businesses.
Upstream Operation: The Zacks Consensus Estimate for earnings after tax from ExxonMobil’s non-U.S. upstream operations stands at $2,848 million, higher than $1,367 million in the year-ago quarter.
Also, for upstream operations in the domestic region, the Zacks Consensus Estimate for after-tax earnings stands at $252 million against the year-ago loss of $183 million.
Downstream Operation: For the downstream business, the Zacks Consensus Estimate for earnings after tax from ExxonMobil’s non-U.S. downstream operations is pegged at $852 million, higher than $621 million in the prior quarter.
For operations in the United States, the Zacks Consensus Estimate for after-tax earnings stands at $441 million, higher than $319 million in the January-to-March quarter and $347 million in the prior-year quarter.
Other Stocks That Warrant a Look
Other stocks in the energy sector that have a positive Earnings ESP and a favorable Zacks Rank are:
Occidental Petroleum Corporation (OXY - Free Report) is involved in both oil and gas exploration and midstream energy businesses. The company has an Earnings ESP of +2.51% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
ConocoPhillips (COP - Free Report) , based in Houston, TX, is a leading upstream energy firm. The company has an Earnings ESP of +5.09% and a Zacks Rank #1.
Canadian Natural Resources Limited (CNQ - Free Report) , an upstream energy player, has an Earnings ESP of +1.42% and a Zacks Rank #1.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>