| ExxonMobil’s Key Stats | |||
|---|---|---|---|
| Q4 2022 (estimated) | 4th quarter of 2021 | Q4 2020 | |
| Adjusted EPS | $3.27 | $2.06 | $0.03 |
| Revenue | $111B | $85B | $46.5 billion |
| Gross profit margin | 16.9% | 21.5% | 9.9% |
The results will reflect similar sales and profit gains from Exxon’s biggest rivals, underscoring the extent to which the war in Ukraine and the post-pandemic economic recovery have driven fossil fuel prices. skyrocketing in 2022. Exxon’s biggest competitor in the United States, Chevron (CVX), reported on Friday that its full-year 2022 profit was up 134%.
Oil and natural gas prices adjusted in the fourth quarter compared to the months immediately following February in Russia Ukraine invasiondisrupted global flows and created local shortages of those key commodities.
But monthly Brent crude oil prices, the global benchmark, remained at an average of $88.75 a barrel in the fourth quarter, up 12% from $79.58 a barrel in the fourth quarter of 2021. And although U.S. natural gas prices fell throughout the fourth quarter amid expected warmer conditions in the Northern Hemisphere, they ended 2022 with an average annual increase of 53% over year 2021.
ExxonMobil’s stock in 2022 reflects that price increase. The company’s shares rose 27% in the fourth quarter, ending the year with an 89% gain. By comparison, the S&P 500 Energy Index is up 22% in the fourth quarter and 59% for 2022—the only index of the 11 S&P 500 stock market sectors to avoid losses for the year (see chart). chart below).
Source: TradingView.
Stock performance after historical earnings
Earnings over or missed may not be the only basis for stocks moving higher or lower soon after earnings are announced. Many stocks end up depreciating despite lower earnings due to other factors that disappoint investors, such as a poor outlook on future growth expectations or non-profit factors such as active users. daily activity (tech company) and load factor (airline). Similarly, unforeseen catalysts, like positive guidance forward or oversold market conditions leading to earnings can help stock prices rise despite missed earnings.
Over the past 12 quarters, Exxon Mobil’s adjusted EPS has surpassed consensus expectations nine times. The stock ended only the next trading session higher in six of those quarters. The average post-earnings volatility is -0.75%.
Although past performance is not a guarantee of future results, the following chart shows the distribution of Exxon Mobil’s share price performance on the trading day following the company’s last 12 quarterly earnings announcements. This information provides active trader with context regarding how stock prices might react the day after the next earnings release.
Regulated Price = Sales, Earnings Slowing
In spite of ExxonMobil derive most of its revenue from the so-called downstream operationssuch as motor oil and other petroleum products, it generates most of its income from upstream operation: exploration and exploitation of oil and gas. Strong year-over-year increases in crude oil prices, which typically account for 70% to 80% of the company’s upstream business, and natural gas underpinned the company’s 2022 profit increase.
However, a disappointing report Friday from competitor Chevron could herald a slump in revenue and profits across the energy industry as the year-over-year rise in crude oil and gas prices dissipates.
Chevron’s fourth-quarter earnings fell short of consensus forecasts amid rising costs and falling profits in upstream operations. Although it was announced earlier this week that it would buy back $75 billion of its stock—or about 20% of market value — its shares fell as much as 5.3% on Friday after missing out on a surprise earnings call.
Like Chevron, Exxon’s fourth-quarter revenue and profit are likely to be down compared to early 2022, when global crude prices remained between $100 and $120 a barrel for six consecutive months after the war. in Ukraine began. Revenue at Exxon is likely to drop for the second straight quarter, and Visible Alpha’s expected net income is down 28% from the third quarter, as profits nearly tripled year-over-year.
In addition, the US Energy Information Administration predicts Brent oil prices will average $83 per barrel in 2023, down 18% from last year, amid rising global crude inventories. The agency expects natural gas prices to average $4.9 per million British thermal units (BTUs) in 2023, down 24% from a year ago.
In the face of concerns about an expected price drop and a downturn for the U.S. economy, investors will likely focus not only on Exxon’s fourth-quarter results on Tuesday, but also on the upcoming quarters. production plan for 2023.
