Do ExxonMobil’s 3Q15 Results Signal a Turnaround?



ExxonMobil’s 3Q15 results

ExxonMobil (XOM) released its 3Q15 financial results on October 30, 2015. In this series, we’ll take a look at those quarterly results. Let’s look first at ExxonMobil’s 3Q15 revenues and earnings. The company recorded $67.3 billion in total revenues and other income, down 37% from $107.1 billion in 3Q14. XOM’s revenues for the latest quarter were dragged lower by falling energy prices.

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ExxonMobil’s 3Q15 earnings

ExxonMobil recorded $4.2 billion in net income for 3Q15, down 47.5% from $8.1 billion in 3Q14. The net income margin dipped to 6.3% in 3Q15 from 7.5% a year earlier. Net income margin is net income attributable to XOM shareholders divided by total revenues for the quarter.

By geography, earnings decreased mostly in ExxonMobil’s US operations from 3Q14 to 3Q15. As for its segments, XOM’s upstream segment continued to tumble, while its downstream segment bucked the trend by improving segment net income, or earnings.

In Market Realist’s previous series on ExxonMobil, we looked at this possibility. You can find out more by reading What Investors Should Look for in ExxonMobil’s F3Q15 Results.

Management observations

ExxonMobil saw lower 3Q15 crude oil prices, as some of the major economies in the world slowed down. In the company’s 3Q15 conference call, management said, “Global economic growth slowed during the third quarter. In the US growth tapered following the strong second quarter. China’s economy continued to decelerate and the recovery in Japan remained weak. However, there is some evidence of economic stabilization in Europe. Crude oil prices resumed their decline after improving in the second quarter, whereas global refining margin strengthened during the quarter. And in chemicals, both commodity and specialty product margins also improved.”

Compared to ExxonMobil, Royal Dutch Shell (RDS.A) recorded a 36% decline in revenue in 3Q15 compared to 3Q14. It recorded $68.7 billion in 3Q15 revenues compared to $67.3 billion for ExxonMobil during the same quarter. ExxonMobil is 1.9% of the SPDR S&P 500 ETF (SPY).

In the next part of this series, we’ll look at ExxonMobil’s earnings compared to estimates.


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