Exxon Mobil Earnings: Stock (XOM) Rangebound, Double Digit Declines Expected

Exxon Mobil's stock (NYSE: XOM) has been ranging between $108 to $115 in recent weeks, as markets seemingly await with baited breath the next set of earnings. The company prints Q2 numbers before the opening bell this morning, with analysts bracing for a challenging report due to lower oil and gas prices.

The stock’s movement reflects market caution ahead of the earnings announcement, with the price hovering around its 200-day simple moving average (SMA) of $111.30.

Markets are projecting a substantial decline in Exxon Mobil's EPS on the quarter, with the expectations of $1.56, a 27% decline on the $2.14 Y/Y.

Revenue is also expected to fall, with the consensus of $80.5 billion, an 13.5% year-over-year decline. These projections mirror broader industry trends, with a sector-wide profit drop expected.

In a preliminary filing earlier this month, Exxon Mobil management signaled a potential $1.5 billion decrease in second-quarter earnings compared to the previous quarter. The company attributed this decline primarily to lower liquids prices, including crude, condensate, and natural gas liquids, which are expected to negatively impact earnings by $800 million to $1.2 billion.

Reduced natural gas prices are also projected to shave off an additional $300 million to $700 million from the bottom line. However, improved refining margins are anticipated to partially offset these headwinds, potentially adding $300 million to earnings.

CEO Darren Woods acknowledged the “choppy” market conditions during the first-quarter earnings call, emphasizing that increased supply had depressed prices despite strong demand. He reaffirmed the company's preparedness to weather market turbulence, stating, “We've built a company that basically is prepared and ready to handle the kind of turbulence that we're seeing in the markets today.”

Markets will be keen to hear how this preparedness translates into concrete actions and results in the face of the current challenges.

In the month leading in to earnings, there have been 13 upside revisions to EPS estimates, set against 2 to the downside. Expectations are low, and XOM has a history of EPS beats (each of the past 4), yet the current range for the stock may prove tough to shift.