Despite project start-ups and problems in Canada, Angola, and Nigeria, Exxon Mobil Corporation (NYSE:XOM) remains one of the largest oil companies in the world, with a lot of its income coming from exploration activities, asset sales in international upstream, and lower corporate charges. The oil giant has been trying hard to halt its declining production volumes, but it is hampered by an number of factors such as entitlement volume impacts and maintenance costs. Also, global economic uncertainty continued with further weakness in Europe and Japan. Still, Exxon Mobil is the world’s second largest company, second only to Royal Dutch Shell plc (NYSE:RDS.A) (NYSE:RDS.B).
Exxon Mobil Corporation (NYSE:XOM) beat expectations with its latest EPS and revenue figures. It reported $2.01 per share versus the $1.96 per share estimates, and revenues of $115.71 billion versus the $115.08 billion estimates. Net income increased 14.5% year-over-year on average across the last five quarters. The biggest gain came in the second, when income climbed 49% from the year-earlier quarter. Revenue fell 7.7% from the same period last year, while EPS was down 1.9%. Exxon Mobil’s net income for the third quarter fell 7.4%from last year figures to $9.57 billion. In spite of this, the corporation distributed $7.6 billion to shareholders in the third quarter, through dividends and share purchases to reduce shares outstanding. Of that total, $5 billion was distributed to purchase shares. Share purchases to reduce shares outstanding are expected to be $5 billion in the fourth quarter of 2012.
On the competition side, Exxon Mobil Corporation (NYSE:XOM) is facing rivals such as Chevron Corporation (NYSE:CVX), Royal Dutch Shell plc (NYSE:RDS.A) (NYSE:RDS.B), and BP plc (NYSE:BP) (LON:BP). Though Exxon suffers from uncertainties in the macroeconomic environment, including uneven growth in China and European Union, its market share is not falling behind the competition. The revenues of Exxon stands at $426.25 billion, far higher than $371.81 billion for Chevron and $224.77 billion for British Petroleum. Exxon Mobil is at 8x EBITDA, compared to Chevron Corporation (NYSE:CVX) at 6x, this shows relative safety.
Exxon Mobil Corporation (NYSE:XOM) has remained active in exploratory activities since 2012. Apart from the Lavani-2 play and others, it began drilling its Hummer Shallow prospect in Walker Ridge near the Jack/St Malo development. In addition, the company acquired a 20% and 35% interest in the Phobos and Thorn prospect, which began drilling in the year. It has also received approval to export from Golden Pass to free trade agreement countries and submitted an application for export to non-free trade agreement countries. The company is also exploring LNG export options to the Gulf of Mexico, Alaska, and Western Canada.
Despite the volatile oil market and declining production volumes, analysts have a positive outlook about the company’s results for the next quarter. The average estimate for the fourth quarter is $2.01 per share, an increase from $1.90 60 days ago. The energy giant’s balance sheet looks sound. According to experts, the company has enough finances to power through any instability in the marketplace and drill enough oil and gas that will keep it profitable in the near future.
