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Analysts Expect ExxonMobil’s Earnings per Share to Fall in 4Q15

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3Q15 estimated and actual performance

ExxonMobil (XOM) is expected to post its 4Q15 results on February 2, 2016. Before we proceed with its 4Q15 estimates, let’s recap XOM’s 3Q15 performance versus estimates.

In 3Q15, XOM’s revenues surpassed Wall Street analysts’ estimates by 13%. Plus, its adjusted EPS (earnings per share) stood at $1, around 14% higher than the estimated EPS of $0.89. However, this was 47% lower than its 3Q14 adjusted EPS. This was due to the impact of falling crude oil prices on the earnings of integrated energy companies.

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Expectations for ExxonMobil’s 4Q15 results

In 4Q15, per Wall Street analysts’ estimates, XOM is expected to post EPS of $0.7. This is 57% lower than 4Q14 adjusted EPS and 34% lower than 3Q15 adjusted EPS. XOM’s revenues are estimated to be around $53 billion in 4Q15, 39% lower than 4Q14 revenues.

In 4Q15, lower oil prices are likely to impact upstream earnings. The downstream segment, which has been resisting the fall in previous quarters, is also likely to witness pressure on its earnings. This is due to the fact that cracks and oil spreads have narrowed in 4Q15, likely due to weakened refining margins.

XOM’s peers Chevron (CVX), Royal Dutch Shell (RDS.A), and BP (BP) are expected to post 73%, 44%, and 66% lower EPS, respectively, in 4Q15 compared to 4Q14. The iShares Russell 1000 Value ETF (IWD) contains XOM and CVX in its portfolio. IWD has ~12% exposure to the energy sector stocks.

XOM’s yearly estimates

In 2015, XOM’s revenues are expected to be around $256 billion, 38% lower than in 2014. Its downstream segment, led by stronger refining margins, is expected to partially offset its steep fall in upstream earnings. According to Wall Street analysts’ estimates, XOM is expected to post EPS of $3.9 in 2015, around 49% lower than 2014 adjusted EPS.

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