uploads///EPS Estimates

Did ExxonMobil’s 3Q15 Earnings Beat Expectations?

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Nov. 2 2015, Published 3:17 p.m. ET

ExxonMobil’s 3Q15 earnings per share versus consensus

ExxonMobil’s (XOM) 3Q15 earnings exceeded expectations. Adjusted EPS (earnings per share) was $1.01, 14% higher than the consensus sell-side analysts’ estimate of $0.89. Adjusted earnings exclude various one-time charges. ExxonMobil’s strong downstream earnings partially offset the effects of lower upstream earnings for 3Q15.

ExxonMobil’s adjusted EPS fell 47% from 3Q14 to 3Q15. The fall in crude oil prices crushed earnings from upstream operations, which affected XOM negatively. In the past one year, West Texas Intermediate (or WTI) crude oil price has fallen approximately 60%.

Between 3Q12 and 3Q15, ExxonMobil’s adjusted EPS fell 44%. As noted in the graph below, ExxonMobil’s adjusted EPS exceeded estimates in many quarters in the past. On average, adjusted EPS has beaten consensus EPS by ~5% in the past 11 quarters.

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Did ExxonMobil’s earnings improve sequentially?

Although XOM’s earnings dipped on a year-over-year basis, it improved marginally by 1% from 2Q15. This was primarily because of strong 3Q15 downstream earnings. In this series, we’ll analyze why XOM’s 3Q15 downstream segment surged.

ExxonMobil’s quarterly revenues versus consensus

ExxonMobil’s 3Q15 revenues beat estimates. Its adjusted revenue at $67.3 billion was 13% higher than the $59.4 billion consensus sell-side analysts’ revenue estimate.

On average, adjusted revenues have exceeded consensus revenues by ~2% in the past 11 quarters. Between 3Q12 and 3Q15, ExxonMobil’s adjusted revenues have decreased 40%. It decreased by 37% from 3Q14 to 3Q15.

ExxonMobil’s share price reaction on earnings

ExxonMobil released its financial information for 3Q15 on October 30, 2015. Its stock reacted positively following the earnings release. On that day, it increased 0.6% to $82.74 from the previous day’s close. Since the beginning of this year, XOM’s share price has fallen 11%.

In comparison, Cenovus Energy’s (CVE) share price has fallen sharply by 28% since the beginning of the year. CVE, an integrated oil company, has upstream operations in Canada and refining operations in the United States. ExxonMobil makes up 17.3% of the Energy Select Sector SPDR ETF (XLE). XLE fell 14% during the same period.

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