Exxon Mobil (XOM) Stock | Effects Of A Crashing Commodity


Exxon Mobil Corp. (NYSE: XOM)

Earnings Report

Exxon Mobil came up short on earnings when they reported Friday morning and their share price took a beating because of it. According to consensus estimates, analyst were expecting $1.11 per share but instead were short changed with just $1.00 per share on $4.2 billion in earnings. This is drastically lower compared to Q2 earnings last year of $8.8 billion in earnings or $2.05 per share, which is mainly due to the price of oil and the saturated inventory levels.

Chairman and CEO Rex Tillerson was more optimistic in his statement accompanying the earnings report as he pointed out the company’s strengths, stating:

“We are delivering on our investment and operating commitments across ExxonMobil’s integrated portfolio. . .  Our Quarterly results reflect the disparate impacts of the current commodity price environment, but also demonstrate the strength of our sound operations, superior project execution capabilities, as well as continued discipline in capital and expense management.”

Even though they have been in a bit of a rut recently, the long term outlook remains positive among analysts with an average price target of $92.22. Weak oil prices have weighed significantly on the energy sector and, if you can stomach the volatility, may create some great buying opportunities for longer term investors, especially since XOM is still rocking a strong 3.7% dividend.


XOM Technicals


XOM has been having a rough year so far as oil prices continue to slide on high inventory levels and consistent production in the Middle East. Looking at the chart you can see that XOM hasn’t broken the 200d SMA all year as it continues to struggle for a positive catalyst to reverse the trend. After the disappointing earnings results, XOM shares got crushed and traded down to new lows of $78.93 on high volume where it finally found a little support and ended up closing at $79.21, down from the previous days close by 4.5%. I wouldn’t be surprised to see some more downward pressure in the near future as oil prices remain under pressure. So far, XOM is down about 10% YTD.


Company Profile

Exxon Mobil Corp. explores, develops and distributes crude oil and natural gas. The company through its divisions and affiliated companies, engages in its principal business, is energy, involving exploration for, and production of, crude oil and natural gas, manufacture of petroleum products and transportation and sale of crude oil, natural gas and petroleum products. It manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics and a variety of specialty products. The company also has interests in electric power generation facilities. It operates business under three segments: Upstream, Downstream and Chemical. The Upstream segment is organized and operates to explore for and produce crude oil and natural gas. The Downstream segment manufactures and sells petroleum products. The refining and supply operations encompass global network of manufacturing plants, transportation systems, and distribution centers provides fuels, lubricants, and other high-value products and feedstock’s to customers. The Chemical segment operates to manufacture and sell petrochemicals. It supplies olefins, polyolefin’s, aromatics, and a wide variety of other petrochemicals. The company operates and markets products in the U.S. and most other countries of the world. Exxon Mobil was founded by John D. Rockefeller in 1882 and is headquartered in Irving, TX. Market Watch