Exxon Mobil is set to announce their fiscal first-quarter results on April 26, with expectations of lower stock trading due to revenue and earnings missing market expectations slightly. The company mentioned changes in gas prices could impact upstream earnings by $200 million-$600 million in Q1. They also expect to report approximately $2.7 billion in impairments related to their upstream business, with oil price changes potentially reducing earnings by $400 million compared to the previous quarter. Additionally, Exxon reported an increase in refining earnings that would be offset by losses from timing effects related to unsettled derivatives.
Despite strong gains in Exxon Mobil stock over the past few years, the company has had inconsistent returns, underperforming the S&P 500 in 2023. Other major players in the Energy sector and various megacap stocks have also struggled to consistently outperform the S&P 500 in recent years. However, the Trefis High Quality Portfolio has consistently outperformed the benchmark index, suggesting a more stable performance. With the current macroeconomic environment uncertain, it remains to be seen if Exxon Mobil will continue to underperform or see a significant jump in the coming months.
Trefis estimates Exxon Mobil’s revenues for Q1 2024 to be around $71.7 billion, slightly below consensus estimates. In Q4, revenue fell 12% year-over-year, with flat upstream production and marginal declines in energy products sales. The company’s Permian production saw a 12% increase in 2023 and is expected to become the basin’s biggest producer once the acquisition of Pioneer Natural Resources is completed. Exxon has high-potential projects, including those in Guyana where they recently began oil production. The company plans substantial investments in Guyana through 2027, aiming to produce close to 1 million barrels per day by the end of the decade.
Exxon Mobil’s EPS for Q1 2024 is expected to be $2.05, slightly below consensus estimates. In Q4, the company’s GAAP earnings dropped from $12.75 billion to $7.63 billion year-over-year. The stock price estimate is lower than the current market price, with a valuation of around $108 per share, almost 11% below the current price. Exxon is diversifying into renewable energy with projects in blue hydrogen and carbon capture technologies, aiming to tap into a growing industry expected to be worth $4 trillion by 2050. Understanding how Exxon Mobil compares to its peers can provide valuable insights for investors.
Overall, Exxon Mobil faces challenges in the upcoming quarter with potential impacts on revenue and earnings. The company’s focus on high-potential projects and efforts to diversify into renewable energy may provide long-term growth opportunities. Investors will be closely watching the Q1 results to gauge the company’s performance and future prospects in a volatile market environment.
