Exxon Mobil to Face Earnings Decline Ahead of Results Announcement

Exxon Mobil is expected to report a drop in EPS as it prepares for its earnings release. Analysts anticipate challenging conditions, but positive long-term prospects remain. Investors should keep an eye on earnings performance and strategic cost management.

Date: 14-04-2025

AI Rating: 5

Earnings Per Share (EPS): Exxon Mobil is projected to report a non-GAAP EPS of $1.69 for the first quarter, reflecting an 18% decline from the prior year's figure of $2.06. This substantial drop is an area of concern, as it indicates potential weaknesses in profitability amid volatile market conditions.

The outlook for fiscal 2025 also appears subdued, with a projected EPS of $7.04, down 9.6% from the previous year. Despite this, analysts forecast a strong rebound for fiscal 2026, with EPS expected to increase by nearly 21.9%. This could suggest that current difficulties may be temporary, and effective management could lead to recovery.

Net Income and Revenue Growth: The company's full-year revenue for the previous period was $83.4 billion, showing a slight decline of 1.1% year-over-year, which fell short of the street expectation of $87.2 billion. A revenue miss can lead to further stock price pressure, as it raises concerns about growth prospects.

Despite these disappointments, Exxon has managed to control its costs effectively, saving $2.4 billion through structural efficiencies, creating a more favorable environment for maintaining profit margins moving forward.

Return on Equity (ROE): The recent report highlighted an industry-leading Return on Capital Employed (ROCE) of 12.7% for fiscal 2024, showcasing solid performance in asset utilization and management. This metric is crucial for investors, as it reflects the company’s ability to generate returns from its investments.

Overall, while the immediate outlook appears challenging due to lower earnings forecasts, effective cost management and forecasted EPS improvements in future years present possibilities for recovery. Investors should remain cautious but optimistic about Exxon's longer-term potential.

Stocks: XOM