Exxon Mobil Quarterly Analysis

Exxon Mobil Q1 Estimates

Here are my estimates for Exxon’s first-quarter earnings due out Thursday, April 29th:

Q1 Revenue Estimate:  $92.9 Bil

Q1 EPS Estimate:  $1.37

I completely underestimated just how much time I would spend on Exxon’s (“XOM”) earnings.  Most of my efforts were dedicated to creating various revenue models.  Those who regularly follow this blog know that the first step I take when analyzing a company is to estimate total revenue.  They also know that I have five particular models of regression that I regularly employ:  First-Order Polynomial, Deseasonal, Dummy Coding, Autoregression, and Exponential.  For those of you without a statistics background, I hope that you will not get too discouraged by my lingo.  Regression is simply a way to forecast numerical data (in this case revenue) by using independent variables, like historical GDP or crude oil prices.  After many attempts at creating a revenue model accurate enough to predict last quarter’s sales, I finally realized that crude oil prices were the best predictor of XOM’s earnings.  I wasted so much time creating complicated models, when all I had to do was regress past revenue against the price of crude oil.  As a result, the model I created predicts with a high level of accuracy (R^2) that Q1 revenue will come in at $92.9 Bil.

Once revenue was determined, everything else seemed to fall right into place.  After creating and analyzing common-size income statements over the past twelve quarters, I settled on a Q1 EPS estimate of $1.37.  This is $0.03 below current Street consensus, which actually goes along with analysts’ past tendency to overestimate Exxon’s quarterly EPS.  In fact, analysts have overestimated the past four quarterly EPS numbers by an average of 4.75%. 

After reading through hundreds of pages of past financial statements, Exxon appears to be a steady, giant, and unwavering example of American Capitalism.  

Here are my line-by-line estimates for Q1:

Income Statement
Three months ended March 31, 2010
Operating Revenue	$92,888
Income from equity affiliates	$2,508
Other income	$68
Total Revenue	$95,464
Costs & Other Deductions:
Crude Oil	$49,496
P&M	$9,452
SG&A	$4,392
Depr & Dep	$3,253
Exploration Exp	$615
Int Exp	$93
Sales-Based Taxes	$7,577
Other Taxes	$9,694
Total	$84,572
Income before Taxes	$10,891
Income Taxes	$4,337
NI w/ NC Interests	$6,555
NI Attributed to NC Interests	$95
Net Income	$6,460
EPS	$1.37

   

Over the next couple of days, I will be posting Q2 revenue and EPS estimates, along with a 1-Year Price Target, so be on the look-out for that!

If you like what you’ve been reading, be sure to click “Follow” in the upper-right portion of your screen.  Also, I always encourage my readers to leave a comment (even anonymously) anytime they have something to say.

XOM Ownership

Author:   NO

Author’s Family:  NO

Disclaimer:
· Opinions, estimates and projections contained in this report are of the author as of the date published and are subject to change without notice.
· This report is not, nor should it be construed as, an offer to sell or solicitation of an offer to buy any securities.
· Unless otherwise noted, all research reports provide information of a general nature and do not address the circumstances of any particular investor.