Shares of ExxonMobil (XOM) have tumbled 12.5% since it last reported earnings results on November 2. Though shares were initially buoyed by the stronger-than-expected third-quarter results, investors soon turned their focus to the spiraling crude oil prices, which fell almost 40% in the October to December period.
Oil prices, however, partially recovered in the start of this year when Russia and OPEC countries slashed its production, as promised, from January 1. While US production continues to be at record highs, there is some respite as Saudi Arabia is also reportedly planning to peg its exports.
A slew of energy companies are scheduled to report results in the coming days – Royal Dutch Shell (RDSA) and ConocoPhillips (COP) will report on Thursday, January 31, while Exxon and Chevron (CVX) will post results on Friday. Earnings and expectations of these companies would set the tone for the energy industry in 2019.
Analysts expect Exxon to report earnings of $1.05 per share on revenues of $74.18 billion. During the same quarter last year, the energy giant reported earnings of $1.97 per share on revenues of $66.5 billion.
Investors may expect to hear a lot about headwinds in both the upstream and downstream operations during the post-earnings conference call. Also, expect commentary on the economic slump in China and the impact of the trade tensions in the oil industry. In December, the Asian country reportedly witnessed a fall in both exports and imports.
Another key area to look out for is the commentary on the impact of the recently imposed sanctions on Venezuela’s state-owned oil company Petróleos de Venezuela (PDVSA). Though Exxon has already scrapped its operations in Venezuela, the embargo could dent its refining activities.