Exxon’s SEC Filing Suggests Earnings Will Be Better Than Wall Street Thinks. Why Its Stock Is Dropping.
People put gas in cars at an Exxon station
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Exxon Mobil (XOM) released an update of factors impacting its fourth-quarter profits that suggests a likely earnings beat when it reports on Feb. 1. The stock is dropping, however, as oil prices slip.
After Thursday’s close, Exxon (ticker: XOM) submitted a filing to the SEC that lists the factors that will impact its fourth-quarter earnings, including “market dynamics, seasonal patterns, and planned activities.” It’s a lot of numbers broken down by segment, but Wall Street quickly pounced on the filing to do the math.
Credit Suisse analyst Manav Gupta notes that Exxon’s “upstream” business—the division devoted to exploring and drilling for oil—could be up $2 billion or more, and, combined with all the other changes, would put net income at $8.25 billion, or $1.93 a share at the middle of the range. That would be well above Wall Street’s forecast for $1.72 and his own $1.64. As a result, Gupta raised his fourth-quarter estimate to $1.92.
The filing, Gupta says, should also be good news for the other oil companies in his coverage including Chevron (CVX), Suncor Energy (SU), Cenovus Energy (CVE), Imperial Oil
(IMO), and Canadian Natural Resources (CNQ).
Despite the good news, Exxon stock has dropped 0.3% in premarket trading, while the Energy Select Sector SPDR ETF (XLE) has slipped 0.5%. Blame, though, is easy to place: WTI Crude oil futures, the U.S. benchmark, have declined 1.6% to $75.74.
No matter the good news, Exxon is still an oil company.
Write to Ben Levisohn at [email protected]
