What to Expect from Exxon Mobil's Q4 Earnings

Michael Teague  |

Exxon Mobil, Inc. (XOM) is widely expected to post strong numbers in its fourth quarter earnings report on Friday.  This is partly to do with several one-time events that had a negative impact on earnings during Q3, such as operational downtime and asset divestments.  The company’s increasing focus on shale oil and gas developments in North America (the Marcellus shale in New York State, for example) is also likely to play a part in stronger Q4 results.

Throughout 2012 the company took a hit from the general economic slump in key regions of consumption (North America, China, Europe).  Low demand has meant lower prices for crude oil and natural gas. To some extent, this may be offset in Q4 by, most notably, China’s unexpected economic growth this past year.

Exxon reclaimed its position as the largest company by market cap in the world from Apple (AAPL) last week.

The earnings report is expected to indicate an Earnings Per Share growth of somewhere around 2.5 percent, and slated to increase to 8 percent a year for the next two years.  Exxon’s profits are enormous, it has little debt, and its dividend payout is $2.28.  As previously mentioned, the company is strongly positioned to take advantage of new forms of oil and natural gas extraction and production, especially in North America where hydraulic fracturing is presenting itself as an increasingly attractive opportunity for energy companies.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

Watchlist

Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     
BA

     
WMT

     
DIS

     
GOOG

     
XOM

     
BRK.A

     
FB

     
JNJ

     
WFC

     
T

     
NFLX

     
TSLA

     
V

     
UNH

     
PG