Exxon Mobil’s (NYSE:XOM) share price flipped back considerably in the few weeks from its 52-week high of almost $95 a share to about $87 a share. XOM’s stock price chops down in the midst of poor quarterly results from the whole energy sector along with a fall in crude oil prices back to the level of just about $44 a barrel.
In Q2, Exxon missed both profit and income expectations by a large margin and marked the seventh back to back quarter of decrease in income. The organization blamed lower product costs and weaker refining margin for the huge decrease in its profit.
In Q2, its upstream profit declined about by 85% to $294M, relative to income of $2B in the same quarter of a year ago. XOM’s US upstream segment generated the biggest loss, amplifying its loss from $47M in a year ago’ quarter to $514M in Q2 of this current year.
Oil majors are in a bad position, as their downstream operations additionally began falling in Q2 in the midst of weaker refinery margins.
In the latest quarter, XOM’s downstream earnings declined almost by half to $825M from $1.5B in the same quarter of last year. Nevertheless, Exxon’s chemical businesses exhibited some strength in its financial performance, as this segment posted earnings of almost $1.5B.
E&P companies are always unpredictable and their stock price and money related execution is reliant on changes in oil prices. However, an unpredictable business environment keeps on making a few appealing purchasing open doors for financial specialists, which could prompt huge benefits in brief timeframes.
The decrease in the XOM’s stock price is a case of that instability and an open door for worth financial specialists, who are looking for enormous profits inside a brief timeframe.
XOM is among those organizations that have maintained their dividends regardless of an altogether low oil pricing environment. Actually, Exxon has raised its quarterly dividend in the last quarter, thanks to its strong cash generation potential and a strong liquidity position.
Despite the fact that Exxon’s income and profit got cut in the last few consecutive quarters, it looks in a strong position to battle headwinds with its broad business structure and smart capital allocation strategy. The broad business structure permits the organization to generate enormous cash in a brief timeframe by selling non-core assets.