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.