ExxonMobil is an American multinational oil and gas corporation and is one of the largest oil producers in the country. The company will be publishing its fourth quarter-final earnings and there are many predictions regarding the reports.
As the year 2022 saw a surge in the demand and thereby the price for commodities like oil and natural gas, the company is expected to report a 50% increase in its net worth.
Apart from being the largest oil and natural gas producer in the United States, ExxonMobil is also regarded as the most valuable public energy company in the world.
As there was a great demand for commodities like oil and natural gas in the year 2022 owing to different citations like the Russia – Ukraine feud, the net worth of the company is expected to have a huge rise.
During the fourth quarter last year, ExxonMobil reported that the company was able to earn around $8.8 billion ($2.06 per share) and total revenue of $85 billion.
Not only ExxonMobil but 2022 was reported to be a year in which energy companies were able to generate increased profit worldwide, as the demand for the product was greater, thereby increasing the price too.
The quarterly reports of almost all major companies that deal with products like fossil fuels are reported to have surged in their profit when compared to last year’s. Experts say that there are two main reasons for the rise in profits for these companies.
The first and foremost reason is the ongoing feud between Russia and Ukraine. The degree to which the war has affected the supply and demand for energy is beyond anything reported.
Being one of the biggest suppliers of natural gas and other fuels, the withdrawal of Russia from its supply to Europe put many countries in jeopardy, forcing them to look for alternative sources.
Another reason is the COVID-19 pandemic that hit almost every country alike. Even though the pandemic is finally said to be under control, the recovery from the hard-hit disaster is not as easy and the process gave rise to a huge demand for fossil fuels.
While comparing the price of Brent crude oil which is seen as the global benchmark price, with the price in the same quarter last year, there had been a 12% rise. Last year, the price for a barrel was around $79.58 while the price for a barrel is almost $88.75 this year.
Also, the demand for fuels in the northern hemisphere during the fourth quarter is always expected to be higher owing to the climatic conditions of the place.
Even though the climatic conditions were warmer in the Northern Hemisphere than expected this paved the way for a lesser demand than the expected range. But even though the demand was not high as expected, there was a recorded increase of 53% compared to 2021.
This increase in demand and thereby the price can also be seen in the total profits gain of ExxonMobil. There was a rise in the share of the company by about 27% and the company was also able to record a gain of 89%.
ExxonMobil is a multinational American oil and gas company that has its headquarters in Irving, Texas. The company started off as Standard Oil but they split from the merger and later joined Mobil in 1999 to the present name.
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The history of the company traces back to 1882, which is almost 140 years ago. ExxonMobil is regarded as one of the world’s largest companies by revenue and is also the largest investor-owned oil company in the world.
It is reported that the major share of revenue generated by the company comes from the so-called downstream operations, which are the operations that are involved in the process of converting oil and gas into finished products.
While downstream processes constitute the revenue generation of the company, most of the earnings of the company, which is the profit, come from upstream operations. Upstream operations include processes like exploration, extraction, and drilling.
Even though the earnings report of a company is a crucial part of the future of the company’s stocks and prices, the earnings beat or miss cannot be seen as the sole factor for the movement of stock up or down in the market.
There are different cases where the stocks ended up losing ground even after they had an earning beat because of other factors which were considered by the investors like the probable poor growth or performance in the future.
Just like this, there are also cases where stocks have gained price with the application of additional measures like a positive guide forward or any sort. As for ExxonMobil, the company was able to beat the consensus expectations nine times in the past 12 quarters.