ExxonMobil’s 1Q17 Estimates: The Good with the Bad
4Q16 estimated and actual performance
ExxonMobil (XOM) is expected to post its 1Q17 results on April 28, 2017. Before we proceed with the 1Q17 estimates, let’s recap XOM’s 4Q16 performance versus estimates.
In 4Q16, XOM’s revenues missed the Wall Street expectation by 2%. ExxonMobil’s 4Q16 reported EPS (earnings per share) stood at $0.41. After adjusting for impairment charge, XOM’s adjusted EPS stood at $0.90 in 4Q16, which was about 28% higher than its estimated EPS of $0.70. XOM’s 4Q16 adjusted EPS was also 34% higher than the 4Q15 EPS.
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ExxonMobil (XOM) reported a decline in earnings from $2.8 billion in 4Q15 to $1.7 billion in 4Q16. Excluding impairment, XOM’s adjusted net earnings rose on a YoY (year-over-year) basis. The company’s upstream earnings also rose YoY for the quarter, though the Downstream segment saw its earnings fall from $1.35 billion in 4Q15 to $1.24 billion in 4Q16 due to lower margins.
ExxonMobil’s 1Q17 estimates
According to Wall Street analysts, ExxonMobil is expected to post EPS of $0.87 in 1Q17, which would be more than double its 1Q16 EPS but 3% lower than its 4Q16 adjusted EPS. XOM’s revenues are estimated to be around $67 billion in 1Q17, which would be 38% more than its 1Q16 revenues.
In 1Q17, average crude oil prices have stood higher than in 1Q16, which could lead to better upstream earnings YoY basis. But XOM’S Downstream earnings are likely to be healthier due to a better refining crack environment in 1Q17 as compared to 1Q16.
By comparison, Royal Dutch Shell (RDS.A) and BP (BP) are also expected to post 101% and 141% higher EPS in 1Q17, respectively, as compared to 1Q16. Chevron (CVX) and Suncor Energy (SU) are expected to see a steep surge in their earnings in 1Q17 compared to losses in 1Q16.
If you’re hunting stocks for exposure to large US companies, you might consider the SPDR Dow Jones Industrial Average ETF (DIA), which has ~6% of combined exposure to integrated energy majors XOM and CVX. If you’re looking for exposure to core S&P 500 Index stocks, you might check out the SPDR S&P 500 ETF (SPY), which has ~7% exposure to energy sector stocks including XOM and CVX.