Earnings Preview: Big Oil On Tap This Week

As we enter the heart of earnings season, all eyes are fixated on bellwether firms and how they have fared over the most recent quarter. The coming week will be a big one for the crude oil industry, as the vast majority of leading oil producers will report in the coming five-day stretch. Crude oil has been under a microscope since experiencing downward pressure in the latter part of 2012. Since then, the commodity has rallied nearly 11%, which may have a big impact on the underlying revenues of big oil [for more oil news and analysis subscribe to our free newsletter].

Below, we preview the earnings reports from the major oil firms reporting this week:

  • ConocoPhillips (COP): After spinning off its midstream, downstream, marketing and chemical operations into Phillips 66 in May of 2012, COP has been stuck in something of a sideways rut. The stock will report on Wednesday and is expected to show EPS of $1.42 with revenues of $13.3 billion. Note that the predicted revenues will mean a 78% drop from the same quarter a year prior, not a surprise given the Phillips 66 split.
  • Phillips 66 (PSX): Speak of the devil, Phillips 66 will also report on Wednesday, January 30. PSX has had quite the run up since going it alone; the stock has surged more than 90% since making its debut. Analysts are predicting EPS of $1.67 with revenues eclipsing $46 billion [see also How To Profit From Record U.S. Oil Production].
  • Oil RefineryMarathon Petroleum Corportaion (MPC): Based in Findlay, Ohio, Marathon Petroleum Corporation operates six refineries through out the Gulf Coast as well as the Midwest. Also reporting on Wednesday, analysts are calling for EPS of $2.08 and revenues over $19 billion.
  • Occidental Petroleum Corporation (OXY): This California firm has been grabbing headlines due to the oil reserve that lies between Los Angeles and San Francisco that is believed to contain approximately 400 billion barrels of oil. Many are speculating that this site could be the next oil boom for the United States. OXY will report earnings on Thursday and is expected to show EPS of $1.67 with revenues at $5.8 billion [see also Crude Oil Guide: Brent Vs. WTI, What’s The Difference?].
  • Royal Dutch Shell (RDS): The British giant will follow Occidental and report on Thursday. The results will be particularly noteworthy given that Shell is Europe’s largest oil company. Analysts are predicting the firm’s earnings, “excluding one-time items and inventory changes are expected to rise 42 percent to about $6.8 billion,” writes Bloomberg.
  • Chevron Corporation (CVX): Starting things off Friday, Chevron will detail results that will be especially crucial given that the stock has been on a tear since November. The Street is expecting EPS of $3.01 with healthy revenues of $68.6 billion. Note that CVX has met expectations only once in its last four reports.
  • Exxon Mobil (XOM): Last but not least, the biggest name in the space will report on Friday. Exxon has been in a heated battle with Apple (AAPL) in the past year for the most valuable firm in the world, and it was able to surpass the tech company briefly on Friday. The giant is expected to show EPS of $2.02 with revenues just over $117 billion.

Beyond the Numbers

While earnings season often comes down to the figures each company reports, the fate of the stock also hangs on guidance. A company that exceeds expectations but offers a negative guidance for the future may still see its stock plummet on the day. Take Apple for example; the firm reported record sales this quarter but a less-than-ideal guidance about future growth, and the company shed nearly 11% of its stock price and $47 billion in market cap in just one day. Be sure to take a look at the whole picture when deciphering earnings results, as both outlook and results can have an equal sway on the individual stocks.

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Disclosure: No positions at time of writing.

This entry was posted in Actionable Ideas, Asset Allocation, Brent Oil, Commodity Producers, Energy, Natural Gas, WTI and tagged , , , , , , , . Bookmark the permalink.

Commodity HQ is not an investment advisor, and any content published by Commodity HQ does not constitute individual investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities or investment assets. Read the full disclaimer here.

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