Exxon Mobil Stock: Know When to Get In

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Exxon Mobil (NYSE:XOM), the world’s largest integrated oil and gas company, on Thursday morning released its first-quarter earnings figures. The company beat analysts’ estimates for earnings per share, which came in at $2.10 per share versus $1.88 per share estimates and versus $2.12 per share for the first quarter of 2013.

However, net income fell by over 4 percent to $9.1 billion, with the smaller fall in earnings per share resulting from the company’s stock repurchase program. The strength relative to analyst estimates was due primarily to the company’s higher realized sales from natural gas, which had a very strong first quarter before falling in price.

Revenue of $106.8 billion missed analyst estimates of $109.8 billion as a result of lower volumes from the company’s upstream business. The primary reason for the decline in oil production was the expiration of the company’s Abu Dhabi onshore concession, which is a onetime event.

The stock didn’t move much on the news, with shares down $1 each, or about 1 percent, although investors should keep in mind that the stock was due for a pullback given that it just traded at a new all-time high. Investors have been relatively positive on the integrated oil space, and Exxon Mobil shares in particular, for a variety of reasons, including:

  • A sustained higher oil price.
  • Relative value on a price-to-earnings basis in a market where many companies’ valuations are overextended.
  • Shareholder-friendly policies.

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