ExxonMobil (XOM) Expects Higher Oil Price to Boost Q2 Earnings
Exxon Mobil Corporation XOM recently expressed optimism regarding higher oil prices significantly contributing to its second-quarter 2021 upstream earnings by as much as $1 billion compared with the March quarter of this year. Overall, the leading integrated energy company now projects a significant sequential improvement in results for its three key business lines, considering the core operations.
The company projects operating results in the second quarter from the oil and liquids businesses to improve $600 million to $1 billion as compared to the March quarter of 2021, thanks to an uptick in oil prices. The change in natural gas prices is likely to have contributed another, a maximum of $400 million, to profits of the upstream business, as forecasted by the energy major. It is to be noted that the rolling out of coronavirus vaccines, which led to expectations that economies will rebound strongly later this year, primarily helped commodity prices move north in the June quarter of 2021.
Moreover, ExxonMobil estimated $500 million to $700 million of sequential improvement in contributions from the downstream business in the June quarter, thanks to improved refining margins. From the chemical business, the company estimated profit to increase $700 million to $900 million owing to a healthy chemicals margin.
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Currently, ExxonMobil sports a Zacks Rank #1 (Strong Buy). Other prospective players in the energy sector include Whiting Petroleum Corporation WLL, Continental Resources, Inc. CLR and PDC Energy, Inc. PDCE. While Whiting Petroleum and Continental Resources sport a Zacks Rank #1, PDC Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days.
Continental is expected to witness earnings growth of 256% in 2021.
PDC Energy is likely to see earnings growth of 111.8% in 2021.
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