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Will ExxonMobil's (XOM) Upstream Business Hurt Q1 Earnings?
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Exxon Mobil Corporation (XOM - Free Report) is geared up to release first-quarter 2020 results on May 1, before the opening bell. Since the upstream business contributes mostly to its earnings, the company is likely have borne the brunt of weak commodity prices in the March quarter.
Upstream Business
ExxonMobil’s upstream businesses fall under core operations. This segment reflects the company’s activities related to exploring, and developing oil and natural gas resources.
From upstream operations, within and outside the United Sates, the firm reported earnings of $14.4 billion in 2019. The profit represents 83.2% of total earnings from its three segments during the said period.
Upstream Performance in Q4
Non-U.S. Operation: During fourth-quarter 2019, ExxonMobil reported earnings of $6.1 billion from upstream activities outside the United States. This marked an improvement from the year-earlier profit of $3.1 billion, thanks to higher realizations of liquid prices.
U.S Operation: From domestic operations, ExxonMobil reported profits of $68 million compared with the year-ago quarter’s $265 million. Lower gas prices hurt domestic operations.
Q1 Oil Price
Weak global energy demand owing to the coronavirus outbreak mostly led oil prices to trade in the bearish territory, especially in the last two months of the March quarter. The last month saw the lowest price in first-quarter 2020 since OPEC and Russia failed to agree on how much oil production to cut amid the pandemic. Thus, weak crude prices are likely to have hurt ExxonMobil’s upstream operations in the first quarter, in both the international and domestic markets.
Forecast for Q1 Oil & Gas Production
The Zacks Consensus Estimate for first-quarter production is pegged at 3,949 thousand barrels of oil equivalent per day (MBoE/D), suggesting a decline from the year-ago quarter’s 3,981 MBoE/D.
Production of Crude & Natural Gas Liquids: The consensus estimate for overall crude oil and liquids production is pegged at 2,415 thousand barrels per day (MBbl/D), indicating an improvement from 2,327 MBbl/D in the year-ago quarter, which can be partly attributed to Shale output.
Natural Gas Production: The Zacks Consensus Estimate for overall natural gas production available for sale is pegged at 9,206 thousand cubic feet per day (Mcf/d), implying a decline from 9,924 Mcf/d in first-quarter 2019.
Upstream Profit to Deteriorate in Q1
Prices and production of commodities are the two key parameters that determine the fate of upstream operations. With oil equivalent production likely to have deteriorated and oil pricing scenario bleak, the Zacks Rank #3 (Hold) company’s earnings from upstream businesses are likely to have declined.
Non-U.S. Operation: The Zacks Consensus Estimate for earnings after taxes from non-U.S. upstream operations is $1.1 billion, pointing to a decline from $2.8 billion reported in the year-ago quarter.
U.S. Operation: The Zacks Consensus Estimate for after-tax loss from upstream operations in the domestic region is pegged at $461 million, against a profit of $96 million in the year-ago quarter.
Earnings & Revenue Projections
The weak upstream business is likely to have hurt the company’s results in the March quarter of 2020. Notably, the Zacks Consensus Estimate for first-quarter earnings of 4 cents per share suggests a decline of 92.7% year over year. Moreover, the Zacks Consensus Estimate for sales of $53.8 billion indicates a 15.4% year-over-year decrease.
Other big integrated energy players like TOTAL S.A. , Royal Dutch Shell plc and Chevron (CVX - Free Report) are set to report first-quarter earnings on May 5, Apr 30 and May 1, respectively.
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Will ExxonMobil's (XOM) Upstream Business Hurt Q1 Earnings?
Exxon Mobil Corporation (XOM - Free Report) is geared up to release first-quarter 2020 results on May 1, before the opening bell. Since the upstream business contributes mostly to its earnings, the company is likely have borne the brunt of weak commodity prices in the March quarter.
Upstream Business
ExxonMobil’s upstream businesses fall under core operations. This segment reflects the company’s activities related to exploring, and developing oil and natural gas resources.
From upstream operations, within and outside the United Sates, the firm reported earnings of $14.4 billion in 2019. The profit represents 83.2% of total earnings from its three segments during the said period.
Upstream Performance in Q4
Non-U.S. Operation: During fourth-quarter 2019, ExxonMobil reported earnings of $6.1 billion from upstream activities outside the United States. This marked an improvement from the year-earlier profit of $3.1 billion, thanks to higher realizations of liquid prices.
U.S Operation: From domestic operations, ExxonMobil reported profits of $68 million compared with the year-ago quarter’s $265 million. Lower gas prices hurt domestic operations.
Q1 Oil Price
Weak global energy demand owing to the coronavirus outbreak mostly led oil prices to trade in the bearish territory, especially in the last two months of the March quarter. The last month saw the lowest price in first-quarter 2020 since OPEC and Russia failed to agree on how much oil production to cut amid the pandemic. Thus, weak crude prices are likely to have hurt ExxonMobil’s upstream operations in the first quarter, in both the international and domestic markets.
Forecast for Q1 Oil & Gas Production
The Zacks Consensus Estimate for first-quarter production is pegged at 3,949 thousand barrels of oil equivalent per day (MBoE/D), suggesting a decline from the year-ago quarter’s 3,981 MBoE/D.
Production of Crude & Natural Gas Liquids: The consensus estimate for overall crude oil and liquids production is pegged at 2,415 thousand barrels per day (MBbl/D), indicating an improvement from 2,327 MBbl/D in the year-ago quarter, which can be partly attributed to Shale output.
Natural Gas Production: The Zacks Consensus Estimate for overall natural gas production available for sale is pegged at 9,206 thousand cubic feet per day (Mcf/d), implying a decline from 9,924 Mcf/d in first-quarter 2019.
Upstream Profit to Deteriorate in Q1
Prices and production of commodities are the two key parameters that determine the fate of upstream operations. With oil equivalent production likely to have deteriorated and oil pricing scenario bleak, the Zacks Rank #3 (Hold) company’s earnings from upstream businesses are likely to have declined.
Non-U.S. Operation: The Zacks Consensus Estimate for earnings after taxes from non-U.S. upstream operations is $1.1 billion, pointing to a decline from $2.8 billion reported in the year-ago quarter.
U.S. Operation: The Zacks Consensus Estimate for after-tax loss from upstream operations in the domestic region is pegged at $461 million, against a profit of $96 million in the year-ago quarter.
Earnings & Revenue Projections
The weak upstream business is likely to have hurt the company’s results in the March quarter of 2020. Notably, the Zacks Consensus Estimate for first-quarter earnings of 4 cents per share suggests a decline of 92.7% year over year. Moreover, the Zacks Consensus Estimate for sales of $53.8 billion indicates a 15.4% year-over-year decrease.
Exxon Mobil Corporation Price and EPS Surprise
Exxon Mobil Corporation price-eps-surprise | Exxon Mobil Corporation Quote
Upcoming Releases of Other Energy Players
Other big integrated energy players like TOTAL S.A. , Royal Dutch Shell plc and Chevron (CVX - Free Report) are set to report first-quarter earnings on May 5, Apr 30 and May 1, respectively.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>