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Is a Beat in Store for ExxonMobil (XOM) This Earnings Season?

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Exxon Mobil Corporation (XOM - Free Report) is expected to beat second-quarter 2021 earnings estimates when it reports results on Jul 30, before the opening bell.

In the last reported quarter, the leading integrated energy company reported earnings of 65 cents per share, beating the Zacks Consensus Estimate of 59 cents owing to higher chemical margins and improved realized commodity prices. ExxonMobil beat bottom-line estimates in three of the last four reported quarters, the average surprise being 58.7%. This is depicted in the graph below:

Exxon Mobil Corporation Price and EPS Surprise

Exxon Mobil Corporation Price and EPS Surprise

Exxon Mobil Corporation price-eps-surprise | Exxon Mobil Corporation Quote

Let’s see how things have shaped up prior to this announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate for second-quarter earnings per share of $1.02 has witnessed two downward revisions and five upward revisions in the past 30 days. The estimated figure suggests an improvement of 245.7% from the prior-year reported number.

The consensus estimate for second-quarter revenues of $63.7 billion indicates a 95.5% jump from the year-ago reported figure.

What the Quantitative Model Suggests

Our proven model predicts an earnings beat for ExxonMobil this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. 

Earnings ESP: The company’s Earnings ESP is +1.14% as the Most Accurate Estimate of $1.03 per share is pegged higher than the Zacks Consensus Estimate of $1.02. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: ExxonMobil currently has a Zacks Rank #3.

Factors Driving the Better-Than-Expected Earnings

ExxonMobil recently expressed optimism regarding higher oil prices significantly contributing to its second-quarter 2021 upstream earnings by as much as $1 billion compared with the March quarter of this year. Overall, the company now projects a significant sequential improvement in results for its three key business lines, considering core operations.

The company projects operating results in the second quarter from its oil and liquids businesses to improve $600 million to $1 billion as compared to the March quarter of 2021, thanks to an uptick in oil prices. The change in natural gas prices is likely to have contributed a maximum of $400 million to profits of the upstream business, as forecasted by the energy major. It is to be noted that the rolling out of coronavirus vaccines, which led to expectations that economies will rebound strongly later this year, primarily helped commodity prices move north in the June quarter of 2021.

ExxonMobil estimated $500 million to $700 million of sequential improvement in contributions from the downstream business in the June quarter, thanks to improved refining margins. From the chemical business, the company estimated profit to increase $700 million to $900 million owing to a healthy chemicals margin.

Other Stocks That Warrant a Look

Here are some other companies from the Energy space that you may also want to consider, as our model shows that these too have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

Enterprise Products Partners LP (EPD - Free Report) has an Earnings ESP of +0.58% and a Zacks Rank of 3. It is scheduled to report second-quarter results on Jul 28. You can see the complete list of today’s Zacks #1 Rank stocks here.

EOG Resources, Inc. (EOG - Free Report) has an Earnings ESP of +3.54% and a Zacks Rank #1. The firm is scheduled to release earnings on Aug 4.

ConocoPhillips (COP - Free Report) has an Earnings ESP of +8.25% and is a Zacks #1 Ranked player. The company is scheduled to release second-quarter results on Aug 3.