Exxon Earnings on Deck

On the back of record profits seen last year, traders are today readying to receive the latest set of earnings results from the world’s largest energy company Exxon Mobil. Despite record profits for the year as a whole, earnings were seen declining over the second half of last year as energy prices reversed sharply from the highs seen over the first half of the year. With energy prices having fallen further over 2023 traders are now keen to see the extent to which this has dampened Exxon’s earnings.

Profit Warning

In a rare move, the company recently warned that it expects the dip in energy prices to shave between $600 million - $1 billion out of its upstream earnings over Q1. Looking at the estimates for today, the market is expecting EPS of $2.60 on revenues of $85.648 billion. If seen, these figures represent a sharp slowdown from the prior quarter with revenues also lower than the same period a year earlier.

Outlook in Focus

Focus will then be on the energy giant’s guidance for the year ahead. The return of Chinese demand is likely to be a big positive factor though concerns over US demand and recession risks will no doubt be cited as major downside risks. In light of this, Exxon shares look vulnerable to a dip lower near-term particularly if figures today undershoot estimates or guidance is seen to be more subdued.

Technical Views

Exxon

The rally in Exxon shares has stalled recently into the 119.65 level which acted as a cap on last year’s record rally. Given the broader uptrend, focus remains on a further pus higher. However, risks of a correction lower are growing. The key level to watch longer term is the 104.40 level with the bull trend line in that area also.