Oil and gas major-giant Exxon Mobil is scheduled to release its Q4 earnings results tomorrow Jan 31 pre-market with a conference call to follow at 9:30 am ET the same day. 

Capital IQ Consensus calls for EPS of $0.71 and rev growth of +1.8% to $60.9 bln, compared to EPS of $0.67 on revenue of $59.8 bln in 4Q15.

Q3 recap

  • Co reported Q3 earnings of $0.63 per share, $0.03 better than the Capital IQ Consensus of $0.60; rev fell 12.9% year/year to $58.68 bln vs the $60.6 bln Capital IQ Consensus.
  • Cash flow from operations and asset sales was $6.3 bln, including proceeds associated with asset sales of $1 bln.
  • Capital and exploration expenditures were $4.2 bln, down 45% from the third quarter of 2015.
  • Oil-equivalent production was 3.8 mln oil-equivalent barrels/day, with liquids down 5.1% and natural gas up 0.8%. 
  • Earnings results reflected lower refining margins and commodity prices.
    • Upstream earnings were $620 mln in the third quarter of 2016, down $738 mln from the third quarter of 2015 
      • Lower liquids and gas realizations decreased earnings by $880 mln, while volume and mix effects increased earnings by $80 mln 
      • All other items, including lower expenses partly offset by unfavorable foreign exchange effects, increased earnings by $60 mln 
      • On an oil-equivalent basis, production was down compared with the third quarter of 2015 
      • Volumes for the quarter declined 3% to 3.8 mln oil-equivalent barrels per day compared with a year ago, due to unplanned downtime, primarily in Nigeria, and field decline partially offset by increased production from recent project start-ups.
      • ExxonMobil's fundamental Upstream business strategies guide its global exploration, development, production, and gas and power marketing activities. 
    • Downstream earnings were $1.2 bln, down $804 mln from the third quarter of 2015 
      • Weaker margins, mainly in refining, decreased earnings by $1.6 bln while favorable volume and mix effects increased earnings by $170 mln 
      • All other items increased earnings by $580 mln, including lower maintenance expenses and gains from divestments in Canada 
      • Petroleum product sales of 5.6 mln barrels per day were 203,000 barrels per day lower than the prior year mainly due to divestment of the Torrance, California, and Chalmette, Louisiana, refineries.
      • ExxonMobil's Downstream is a large, diversified business with refining, logistics, and marketing complexes around the world. 

Earnings segment breakdown (figures include US, excludes corporate & financing segment):

  • Upstream - made up 39.3% of FY15 after-tax earnings
  • Downstream - made up 36.3% of FY15 after-tax earnings
  • Chemical - made up 24.4% of FY15 after-tax earnings

TECHNICALS:

Technically, XOM has been under-performing here in January as price slides back below its 50-day and 200-day moving averages. There is potential support along its Sept/Nov lows in the 82-vicinity. If it can't, then the next level of interest lies below along the $80-mark. 

Options Activity

Based on XOM options, the current implied volatility stands at ~ 29%, which is 24% higher than historical volatility (over the past 30 days). Based on the XOM Weekly Feb03 $84.5 straddle, the options market is currently pricing in a move of ~3% in either direction by weekly expiration (Friday). 

There was a large buyer of the weekly 84P's today going into the print tomorrow morning.

XOM Weekly

Peers include: PTR, EC, TOT, SNP, STO, E, OXY, SSL, MITSY, ECA, YPF, PZE, RDS.A, BP, CVX