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Tickers in this Article: XOM, MOT
It's just amazing when a company books $11 billion in one quarter - the highest in its history - and then sees the stock fall.

One Thursday, Exxon Mobil (NYSE:XOM) reported second-quarter earnings of $11.68 billion, or $2.22 a share, well over the $10.26 billion, or $1.83 a share, it saw in the same period last year.

Despite the mind boggling net income number for the quarter, Wall Street sold off Exxon Mobil during the session because the billion dollar earnings fell short of expectations. The Associated Press reported that the company now "owns the record for the top 10 most-profitable quarters for a U.S. company, as well as the largest annual profit." But despite the blowout quarter, $11 billion just wasn't enough for investors. (Find out more about this sector in Oil And Gas Industry Primer.)

But here's what's really interesting: Motorola (NYSE:MOT) earned $4 million (not even a penny a share) in the second quarter, but the stock leaped on the day, as the results beat analyst expectations of a 3-cent loss.

Common sense calls this situation just plain dumb, but there are two sides to this coin. Let's take a look.

The Giving Tree Receives
Here's the thing: Motorola's debt/equity ratio is about four times larger than Exxon Mobil; however, Motorola's dividend yield is 35% larger than Exxon's. It's a three-part picture: First, ridiculous Wall Street expectations create a scenario in which even when a company books $11 billion in a single quarter, the stock falls. Second, Wall Street loves an underdog, even if the company is more fundamentally unsound than others within the total marketplace. Third, Motorola's potentially overextended dividend payment (while net income struggles) clearly shows that investors prefer companies that give, instead of greedily hording cash in the best of times.

It seems that investors rarely reward greedy companies, especially in the midst of blowout earnings, when some uncertainty lies ahead.

Therefore, when investors begin coveting a stock, it's important to look beyond the fundamentals and/or technicals, and actually take a step back to examine the situation based on common sense. (For more on these trading styles, check out Blending Technical And Fundamental Analysis.)

With this in mind, when we take a step back and consider that just before respective earnings announcements, Motorola was down about 50% for the year, while Exxon Mobil had declined a lesser (roughly) 11% during the same time period, it's understandable that earnings reactions might raise a few eyebrows.

Much of the answer as to why Exxon Mobil declined while Motorola shot up comes down to expectations. Telecom investors are notoriously more speculative than the stodgy old oil company daters, even if crude is still through the roof. Don't get me wrong, speculators in oil futures are probably cut from the same cloth as those in telecom, but for those trying to crush a quick clip from big oil stocks, perhaps it's a different story.

At the end of the day, investors in big oil generally know that even if profits are through the roof, "shareholder/dividend overgenerosity" are probably not terms thrown around in the boardroom too often.

Don't get me wrong, big oil dividends are not only stable, but also substantial (which is probably why big oil is a great bet over the long haul), but for those seeking quick bursts within the stock, it's probably better to stick to the "exuberance sectors" like technology and telecom.

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