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ExxonMobil (XOM) Earnings Beat in Q3 on High Permian Volumes

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Exxon Mobil Corporation (XOM - Free Report) reported better-than-expected earnings for third-quarter 2019, courtesy of ramped-up liquid volumes in the prolific Permian Basin. This was offset partially by soft fuel margins.

This largest publicly-traded integrated energy company’s earnings per share of 68 cents surpassed the Zacks Consensus Estimate of 64 cents. However, the bottom line declined substantially from the year-earlier $1.46.

Total revenues of $65,049 million missed the Zacks Consensus Estimate of $67,872 and deteriorated from the year-earlier $76,605 million.

It is to be noted that ExxonMobil has divested around one-third of its targeted $15 billion of non-strategic assets. The company added that it has strengthened its portfolio of upstream assets in the September quarter after another oil discovery in the Stabroek block, located off the coast of Guyana. Notably, this is the fourth discovery in Guyana in 2019.

Operational Performance

Upstream: Quarterly earnings of $2.2 billion declined from $4.2 billion a year ago, owing to lower price realizations of commodities.

Total production averaged 3.899 million barrels of oil-equivalent per day (MMBOE/d), higher than 3.786 MMBOE/d a year ago.

Liquid production increased year over year to 2.392 million barrels per day (MMB/D) from 2.286 MMB/D, courtesy of ramped-up activities in the prolific Permian Basin. Also, natural gas production was 9.045 BCF/d (billions of cubic feet per day), marginally up from 9.001 BCF/d a year ago.

Downstream: The segment recorded a profit of $1,230 million, representing a decline of $412 million from $1,642 million in the September quarter of 2018. The underperformance can be attributed to maintenance activities and contraction in the industry’s fuel margins.

ExxonMobil's refinery throughput averaged 4.1 million barrels per day (MMB/D), lower than the year-earlier level of 4.4 MMB/D.

Chemical: This unit contributed to the company’s $241-million profit, down from $713 million in the prior-year quarter, induced by soft margins and increased project expenses.

Financials

During the quarter under review, ExxonMobil generated cash flow of $9.5 billion from operations and asset divestments, down from $12.6 billion a year ago. Owing to significant investments in the prolific Permian Basin, the company’s capital and exploration spending rose 17% year over year to $7.7 billion.

Exxon Mobil Corporation Price, Consensus and EPS Surprise

 

Exxon Mobil Corporation Price, Consensus and EPS Surprise

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

Zacks Rank & Stocks to Consider

ExxonMobil currently carries a Zacks Rank #5 (Strong Sell). Meanwhile, a few better-ranked players in the energy space are Pembina Pipeline Corporation (PBA - Free Report) , Crescent Point Energy Corp. (CPG - Free Report) and Matrix Service Company (MTRX - Free Report) . While Pembina Pipeline sports a Zacks Rank #1 (Strong Buy), Crescent and Matrix Service carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.     

Pembina Pipeline has an average positive earnings surprise of 28.1% for the past four quarters.

Crescent beat the Zacks Consensus Estimate in three of the prior four quarters, the average positive earnings surprise being 235.1%.

Matrix Service has managed to beat the Zacks Consensus Estimate for earnings in three of the past four quarters.

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