Exxon Earnings Top Lowered Expectations

Energy

Published: October 31, 2014 9:10 am

Last Updated: October 31, 2014 9:12 am

Exxon Mobil Corp. (NYSE: XOM) reported its third-quarter results Friday before the U.S. markets opened as $1.89 in earnings per share and $107.5 billion in revenue. Thomson Reuters had consensus estimates of $1.71 in earnings per share and $105.51 billion in revenue. In the third quarter of the previous year, the supermajor posted $1.79 in earnings per share and $112.37 billion in revenue.

It is worth noting that just 90 days ago, Exxon had estimates for earnings per share of $1.93 for the third quarter, which have moved down about 11% to the current estimate of $1.71.

Net income for the third quarter was 8.07 billion, which was up 3% or $200 million from the 2013 third quarter.

During the most recent quarter, Exxon purchased 30 million shares of its common stock for the treasury to reduce shares outstanding at a cost of $3 billion.

Other important stats from Exxon’s third-quarter earnings report:

Production: 3.831 million BOE/Day
Operating Cash Flow: $12.4 billion
U.S. Downstream Net: $460 million
International Downstream Net: $564 million
International Upstream Net: $5.16 billion
U.S. Upstream Net: $1.26 billion
Oil-Equivalent Production: down 4.7%
Capital Expenditures: $9.84 billion
Dividends Per Share: up 9.5% to $0.69

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Chairman Rex Tillerson commented on the third quarter:

Earnings in the period rose 3 percent from the third quarter of 2013, driven by higher margins and improved operations in the Downstream and Chemical businesses, partially offset by the impact of lower Upstream realizations.

ExxonMobil’s quarterly results demonstrate the strength of our integrated business model. Integration across Upstream, Downstream and Chemical gives us competitive advantages in scale, efficiency, technical and commercial capabilities, regardless of market fluctuations over the business cycle.

The Corporation’s cash flow from operations and asset sales through the first nine months of 2014 fully covered net investments and shareholder distributions.

We continue to meet our operational and project development objectives. Upstream production for 2014 remains on track with previous full‑year estimates of 4 million oil‑equivalent barrels per day as the company adds new production from project startups.

On October 21, Jefferies reiterated a Hold rating for Exxon and lowered its price target to $93 from $96. J.P. Morgan initiated coverage of Exxon with a Neutral rating and a price target of $104 on September 23.

Shares of Exxon closed Thursday down 0.15% at $94.45. Following the release of the earnings report, the initial response in the premarket was positive and shares were up around 2% at $96.20.

The consensus analyst price target is $101.21, and the 52-week trading range of $86.91 is $104.76. Exxon has a market cap near $402 billion.

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