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ExxonMobil (XOM) Expects Oil & Gas Price Hike to Aid Q3 Earnings

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Exxon Mobil Corporation XOM recently expressed optimism over the significantly higher oil and gas prices contributing to its third-quarter 2021 upstream earnings. The integrated energy giant is expecting its upstream business to generate a maximum of $1.5 billion more earnings in the third quarter sequentially. The company also projects a significant sequential improvement in its downstream business – a key operating unit.

The company projects operating results in the third quarter from the oil and liquids businesses to improve $200 million to $600 million compared to the June quarter of 2021, thanks to an uptick in oil prices. The improvement in natural gas prices is likely to have contributed another $500 million to $900 million to upstream business profits, as estimated by the energy major. The rolling out of coronavirus vaccines, which led to expectations of a strong rebound in economies, primarily helped commodity prices move north in the September quarter of 2021.

ExxonMobil estimates $500 million to $700 million of sequential improvement in earnings from the downstream business in the September quarter, thanks to improved refining margins. However, from the chemical business, the company estimates profits to decrease $200 million to $400 million due to an unhealthy chemicals margin.

Improving fuel demand is likely to have aided the energy businesses in the third quarter. Per Zacks Earnings Trends, the energy sector is on track to generate $21.3 billion in earnings in the September quarter of this year, suggesting an improvement from $17.5 billion recorded in the prior quarter.

Exxon Mobil Corporation Price

Exxon Mobil Corporation Price
Exxon Mobil Corporation Price

Exxon Mobil Corporation price | Exxon Mobil Corporation Quote

Currently, ExxonMobil has a Zacks Rank #3 (Hold). A few better-ranked players in the energy space are Whiting Petroleum Corporation WLL, Continental Resources, Inc. CLR and Range Resources Corporation RRC. All the stocks sport a Zacks Rank #1 (Strong 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 see earnings growth of 428.2% in 2021.

Range Resources has seen upward earnings estimate revisions for 2021 in the past 30 days.


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