Analysts have been projecting the earnings of Exxon. Much to the delight of the investors, increase in crude prices combined with higher output the top line growth could be good for the company. The company has struggled to boost production in 2011. Some of the oil fields that the company operates in have become older and this has added stress on the company. Added to this is that many of its contracts are with foreign governments that limit the amount of crude Exxon can sell as prices rise.
The company’s also owns a refining business that has been hurt by the rising cost of oil and declining gasoline prices. The company recently announced that it was selling its stake in a Japanese refining and marketing business for $3.9 billion. This would help the company raise much needed cash and also reduce the burden of losses due to its refinery business. The move followed a decline in fuel demand in Japan and Exxon’s renewed focus on oil exploration.
Investors will be looking for some strategic investments made by the company in the Kurdistan province which will give the company access to huge oil reserves. Analysts say Exxon recently signed a new exploration contract. They’ll also want to know if Exxon will follow the sale of its Japanese refining business with other refinery sales as that part of its business languishes.
Exxon shares opened lower Monday. By midday, shares were off more than 1% at 84.83 in midday trading. We however maintain a buy on the counter at the moment as improved results over the next two quarters will help the company over the long run. Analysts polled by FactSet expect Exxon to earn $1.97 per share on revenue of $118.83 billion.
In the same part of 2010, Exxon earned $9.25 billion, or $1.85 per share, on revenue of $105 billion