Exxon Mobil ( XOM ) shares rose Wednesday after it signaled that natural gas prices would support already strong expectations for the third quarter. Despite steep growth estimates, the energy giant expects to fall short of its record Q2 profit as oil prices have fallen along with refining and chemicals segment profits.
Exxon reported that its operating profit could come in at about $11 billion in the third quarter, according to federal filings late Tuesday. That would be a sharp increase from $6.7 billion a year earlier, but a significant drop from the record operating profit of $17.6 billion from Q2.
The oil and gas giant’s Q3 earnings outlook primarily examines market dynamics, seasonal patterns and planned activities. Exxon says other margin-related factors, including currency fluctuations, were not included.
However, the earnings report showed that Exxon’s natural gas segment was boosted by rising prices in the third quarter. In August, US natural gas futures hit 14-year highs, topping $10 per million British thermal units (mmBtu). Exxon expects natural gas price strength to lead to a segment profit of $1.8 billion to $2.2 billion in Q3.
Meanwhile, the decline in the prices of oil and other liquids, such as ethane and propane, is expected to result in a loss of $1.4-1.8 billion in these segments. There have also been declining refining and chemical margins this quarter compared to Q2. XOM forecasts a loss of $2.7 billion-$2.9 billion from changes in industry margins for energy products.
Exxon is expected to announce third-quarter earnings on October 28. Analysts expect an earnings gain of 123% to $3.52 per share. stock. Wall Street predicts revenue will jump 42% to $105.1 billion, according to FactSet.
Exxon Mobil stock
Exxon shares rose more than 4% to 99.10 amid a general rise in oil and gas stocks during Wednesday’s trading. That sent shares up nearly 14% so far for the week and well back above their 50-day moving average. The stock is consolidating with a buy point of 105.67, according to MarketSmith, and with an early entry around 101.56.
Market status remains “in correction,” meaning investors should build watch lists and wait for a follow-up day.
Exxon Mobil Stock has a Composite Rating of 97. It has a 96 Relative Strength Rating, an exclusive IBD Stock Checkup measure of stock price movements on a scale of 1 to 99. The EPS rating is 80.
Oil and gas stocks incl Schlumberger (SLB), Marathon Oil Corporation (MRO), WHAT (APA) and Murphy oil (MUR) rose on Wednesday morning, buoyed by the decision by OPEC+ to cut oil production by 2 million barrels per day (BPD).
It was the first production cut since April 2020. The cartel’s move was aimed at supporting oil prices against forecasts of falling economic activity and demand.
US crude oil prices rose 1.5% to 87.80 a barrel on Wednesday. barrel after rising 3% on Tuesday. On Monday, oil rose around 5 per cent. This comes after crude oil futures recorded their fourth consecutive monthly decline in September. Oil prices soared earlier this year, briefly hitting $130 a barrel in March after Russia invaded Ukraine.
However, crude oil prices have fallen more than 30% on fears of a global economic slowdown and weaker energy demand.
Meanwhile, as crude oil prices rose earlier this week, U.S. natural gas futures fell about 4% on Monday to the lowest level since July. However, natural gas prices rose more than 1% on Wednesday to $6.93 a barrel. million British thermal units. That came after natural gas futures rose 5.4% on Tuesday.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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