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Based in Irving, Texas, ExxonMobil (XOM - Free Report) divides its operations into three main segments: Upstream (exploration & production), Downstream (refining) and Chemical (manufacturing & marketing petrochemicals). Over the years, the company has achieved bellwether status in the energy space and an integrated capital structure that has historically produced industry-leading returns.
Q3 Earnings Recap
The energy giant reported stronger-than-expected third quarter results last week.
Adjusted earnings of $1.58 per share, or $6.8 billion, came in just ahead of the consensus estimate of $1.56 as well as increasing by 18 cents over the prior year period. Group revenues spiked 60% to $73.9 billion, also beating expectations of $73.34 billion.
Production levels rose to 3.7 million barrels per day during the period.
Higher West Texas Intermediate crude prices also helped boost XOM’s Q3 performance. WTI traded between $75 and $78 per barrel over the three months ending in September, reflecting a price range that was 95% higher than the same period in 2020.
“All three of our core businesses generated positive earnings during the quarter, with strong operations and cost control, as well as increased realizations and improved demand for fuels,” said CEO Darren Woods, chairman and chief executive officer.
XOM Breaks Out
Year-to-date, shares of XOM have jumped 57.25%, which is nicely above the S&P 500’s 23+% increase. Earnings estimates have been rising too, and XOM is a Zacks Rank #1 (Strong Buy) right now.
For fiscal 2021, eight analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up 60 cents to $5.11 per share. Earnings are expected to grow considerably compared to the prior year period. Fiscal 2022 looks strong too; seven analysts have upped their outlook and our consensus estimate has climbed 78 cents to $5.69 per share.
Looking ahead, management is confident about its path moving forward. Woods commented that the company’s balance sheet is recovering strongly; free cash flow easily covered its dividend in Q3 as well as $4 billion in debt reduction.
This allowed ExxonMobil to not only increase its shareholder payout, maintaining 39 consecutive years of annual dividend growth, but the company also announced plans for a $10 billion share buyback program beginning next year.
ExxonMobil hasn’t been the only oil stock enjoying a rebound in demand lately, and if the current trend continues, shareholders could be in store for even more gains.
If you’re an investor searching for an energy sector stock to add to your portfolio, make sure to keep XOM on your shortlist.
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Bull of the Day: ExxonMobil (XOM)
Based in Irving, Texas, ExxonMobil (XOM - Free Report) divides its operations into three main segments: Upstream (exploration & production), Downstream (refining) and Chemical (manufacturing & marketing petrochemicals). Over the years, the company has achieved bellwether status in the energy space and an integrated capital structure that has historically produced industry-leading returns.
Q3 Earnings Recap
The energy giant reported stronger-than-expected third quarter results last week.
Adjusted earnings of $1.58 per share, or $6.8 billion, came in just ahead of the consensus estimate of $1.56 as well as increasing by 18 cents over the prior year period. Group revenues spiked 60% to $73.9 billion, also beating expectations of $73.34 billion.
Production levels rose to 3.7 million barrels per day during the period.
Higher West Texas Intermediate crude prices also helped boost XOM’s Q3 performance. WTI traded between $75 and $78 per barrel over the three months ending in September, reflecting a price range that was 95% higher than the same period in 2020.
“All three of our core businesses generated positive earnings during the quarter, with strong operations and cost control, as well as increased realizations and improved demand for fuels,” said CEO Darren Woods, chairman and chief executive officer.
XOM Breaks Out
Year-to-date, shares of XOM have jumped 57.25%, which is nicely above the S&P 500’s 23+% increase. Earnings estimates have been rising too, and XOM is a Zacks Rank #1 (Strong Buy) right now.
For fiscal 2021, eight analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up 60 cents to $5.11 per share. Earnings are expected to grow considerably compared to the prior year period. Fiscal 2022 looks strong too; seven analysts have upped their outlook and our consensus estimate has climbed 78 cents to $5.69 per share.
Looking ahead, management is confident about its path moving forward. Woods commented that the company’s balance sheet is recovering strongly; free cash flow easily covered its dividend in Q3 as well as $4 billion in debt reduction.
This allowed ExxonMobil to not only increase its shareholder payout, maintaining 39 consecutive years of annual dividend growth, but the company also announced plans for a $10 billion share buyback program beginning next year.
ExxonMobil hasn’t been the only oil stock enjoying a rebound in demand lately, and if the current trend continues, shareholders could be in store for even more gains.
If you’re an investor searching for an energy sector stock to add to your portfolio, make sure to keep XOM on your shortlist.