- Analysts estimate EPS of $3.60 vs. $1.10 in Q12FY 2021.
- Upstream segment net income is expected to more than triple YOY.
- Revenue is expected to rise for a sixth straight quarter amid rising oil prices.
ExxonMobil Corp. (XOM) has reported explosive growth in earnings and revenue in recent quarters amid surging oil prices. The company's prosperity has sparked sharp criticism from President Biden, who has blamed Exxon and the oil industry overall for sky-high gasoline prices. But despite that criticism, analysts expect ExxonMobil to report a staggering $50 billion in net income in this fiscal year, more than double last year's number and more than triple six years ago.
Investors will be watching to see how these and other factors have impacted ExxonMobil's financial performance when it reports earnings on July 29, 2022 for Q2 FY 2022. Analysts expect earnings per share (EPS) to rise more then three-fold year-over-year (YOY) and for revenue to grow significantly.
Investors also will focus on another key metric: net income for ExxonMobil's upstream segment, which is involved in the exploration, development, and production of oil and natural gas. This segment is highly sensitive to the direction of oil prices. Analysts expect the segment's net income to also more than triple YOY.
Shares of ExxonMobil have significantly outperformed the broader market in the last year. Initially, Exxon shares roughly kept pace with the market through December 2021 before beginning a prolonged rally in early January. The rally continued through June of this year. Since then, Exxon shares have pulled back somewhat between early June and mid-July, but have risen again in the past two weeks. As of July 28, ExxonMobil stock has provided a 1-year trailing total return of 65.5%, far ahead of the S&P 500's total return of -8.4%.
ExxonMobil Earnings History
ExxonMobil's EPS growth has been highly erratic, posting either steep EPS declines or losses in four of the past seven fiscal years. The company posted nine consecutive quarters of YOY EPS declines or losses between in Q4 FY 2018 and Q4 FY 2020. Since then, ExxonMobil has more than recovered lost ground. In all four quarters of FY 2021, Exxon posted a positive EPS compared to a loss per share the same quarter a year earlier. And EPS rose 101.0 % YOY in the first quarter of this year. Now in Q2 FY 2022, analysts expect EPS to rise 228.5%.
ExxonMobil's revenue performance has generally mirrored its earnings. The company reported eight straight quarters of YOY revenue declines during fiscal years 2019 and 2020. The steepest declines were in the last three quarters of FY 2020 amid the global economic impact of the pandemic. But this trend reversed. Starting in Q1 FY 2021, revenue rose sharply in the final three quarters of the year as oil prices staged a sustained recovery. In Q2, analysts expect Exxon's robust revenue growth to continue, with ExxonMobil reporting a 72.9% increase.
|ExxonMobil Key Stats|
|Estimate for Q2 FY 2022||Q2 FY 2021||Q2 FY 2020|
|Earnings Per Share ($)||3.60||1.10||-0.25|
|Upstream Segment Net Income ($B)||10.1||3.2||-1.7|
Source: Visible Alpha
The Key Metric
As mentioned above, investors will also be focusing on net income for ExxonMobil's upstream segment, which is one of the company's three main business segments. Upstream operations are involved in the exploration and development of oil and natural gas properties as well as the extraction and production of crude oil and natural gas. Upstream may be contrasted with downstream operations, which refer to the production of refined oil products and comprise another one of ExxonMobil's main business segments. ExxonMobil also engages in midstream operations, such as the operation of pipelines and storage facilities.
ExxonMobil's upstream net income has performed inconsistently in recent years. Annual net income for this segment roughly doubled from FY 2015 to FY 2017, but then growth slowed dramatically for the next two years. The segment reported a massive $20.3 billion net loss in FY 2020, but then rebounded to post $15.8 billion in net income in FY 2021. In Q2 FY 2022, analysts expect that trend to continue, estimating that net income will rise 216.3%.
Visible Alpha. "Financial Data."
ExxonMobil Corp. "Earnings call – 2Q 2022."
Visible Alpha. "Financial Data."