Tags: Exxon | earnings | oil | XOM

Exxon Mobil Earnings Track Crude Oil

By    |   Friday, 21 Oct 2011 10:54 AM

Energy giant Exxon Mobil (XOM) has posted earnings for the first half of 2011 rivaling the profits the company earned in the commodity bubble year of 2008. The company constantly invests large amounts of money to find new energy sources and increase production, but the bottom line is still most affected by the market price of oil, and to a lesser extent, natural gas.

Exxon Mobil is the world's largest oil and gas producer as well as one of the largest U.S. companies by market capitalization. This is a company which measures quarterly earnings using numbers other companies use to measure revenues — tens of billions. Using 2011 first half numbers, 75 percent of earnings are from oil and gas production, 11 percent is from refining and sales of refined petroleum products, and the remaining 14 percent is the sales of chemicals. More than 75 percent of earnings are generated outside of the United States.

In the first half of 2011, Exxon Mobil reported earnings of $21.3 billion or $4.33 per share, up from $13.9 billion and $2.94 per share in 2010. The consensus earnings estimate for full year 2011 is $8.56 per share, compared to earnings of $6.22 in 2010.

Oil price

Exxon Mobil’s earnings are directly tied to the price of oil. In 2008, the company earned $14.8 billion in the third quarter when oil rocketed towards $150 per barrel. In the fourth quarter, earnings were $7.8 billion as oil finished the year near $40 per barrel.

In 2010, oil averaged $71 per barrel and Exxon's quarterly earnings ranged from $6.3 billion to $9.2 billion as oil slowly increased throughout the year. In the first half of 2011, oil again shot above $100 per barrel and Exxon was able to again earn over $10 billion per quarter.

After peaking in April, oil is trading in the $80 range. Investors considering XOM must consider where they believe oil is going from here.

Recently the analysts at JP Morgan lowered their rating on XOM to underweight from neutral and lowered their target price by $4. In contrast, a month earlier the UBS analysts upgraded the stock to buy from neutral.

The company next reports on Oct. 27.


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Energy giant Exxon Mobil (XOM) has posted earnings for the first half of 2011 rivaling the profits the company earned in the commodity bubble year of 2008. The company constantly invests large amounts of money to find new energy sources and increase production, but the...
Exxon,earnings,oil,XOM
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2011-54-21
Friday, 21 Oct 2011 10:54 AM
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