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4Q15 Earnings Review: XOM’s Stock Performance

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XOM’s stock performance

Exxon Mobil Corporation (XOM) announced its results on February 2, 2016, before the market opened. Although XOM surpassed its estimates for 4Q15, the stock experienced a weak opening. XOM opened at $74.20 per share, lower than the previous close of $76.30.

XOM saw highs of $75.60 and lows of $73.60 during the day. Eventually, XOM closed at $74.60, around 2.2% lower than its previous day’s close, trending in line with its peers.

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On February 2, 2016, XOM’s peers Chevron Corporation (CVX), Royal Dutch Shell (RDS.A), and BP Plc (BP) fell by 4.8%, 4.3%, and 8.5%, respectively. For exposure to energy sector stocks, you can consider the PowerShares Dynamic Large Cap Value Portfolio ETF (PWV). This ETF has ~11% exposure to energy sector stocks.

Exxon Mobil’s capex position

In 2015, Exxon Mobil Corporation (XOM) incurred capital expenditure, or capex, of $31.1 billion, of which $25.4 billion was in the Upstream segment. The company expects to incur capex of approximately $23.2 billion in 2016, around 25% lower than its 2015 level.

In 2015, six projects started production in the Upstream segment that added 300 Mboepd (thousand barrels of oil equivalent per day) of working interest capacity. The Banyu Urip facility started in 4Q15. XOM expects six more projects to start up in 2016.

Exxon Mobil’s management commented, “While our financial results reflect the challenging environment, we remain focused on the business fundamentals, including project execution and effective cost management. The scale and diversity of our cash flows, along with our financial strength, provide us with the confidence to invest through the cycle to create long-term shareholder value.”

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