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ExxonMobil Earnings Preview: Crude Oil's Up Big, So Why Aren't ExxonMobil Shares Surging Too?

EXXONMOBIL (XOM)

Biggest of the big. World's largest integrated oil company (i.e. it does everything from explore to refine). Largest U.S. company by market cap and revenue. Dow component.

Reports Q1 earnings Thursday 5/1 at approx. 8a ET. Conference call at 11a ET.

CNBC.com

WHAT WILL MOVE THE STOCK:

THE MONEY'S IN PRODUCTION - Surging crude prices translate into higher profits for the production or "upstream" operations at oil companies. Look at ExxonMobil's average price realized and also production levels.

THE BAR IS SET HIGH - Better-than-expected results at BP and Royal Dutch Shell have raised expectations for ExxonMobil and other oil giants. However, just one analysts tweaked his estimate this week.

REFINING - This is supposed to be the weak spot for integrated oil companies this quarter. Refining margins (which you can trade in the energy pits) have been unusually low. However BP and Shell's refining profits came in better than expected. Can ExxonMobil follow their lead? Will margins rebound?

NEW OIL DISCOVERED - A key measure for oil companies. Is ExxonMobil replacing the oil it pumps out of the ground with new reserves?

SPENDING ON EXPLORATION & ALTERNATIVE ENERGY - Spending on "capital and exploration projects" is of mild importance to investors, but it has turned into a political football as critics of Big Oil have harped on the "lack" of spending on oil exploration, expanding refineries and development of other energy sources. If Exxon's R&D and exploration spending can be characterized as "small" relative to its profits, critics will continue to use this as a reason to increase taxes and/or cut tax incentives for oil companies.

EVEN THE ROCKEFELLERS WANT CHANGE - Back in the day, John D. Rockefeller was big oil. Today, his descendants still own a fair chunk of ExxonMobil and they're not happy with the company's level of involvement in researching alternative energy sources.

ESTIMATES:

Q1 EPS up 32% to $2.14, revenues up 43% to $124.430 billion, net income up 23% to $11.393 billion

Q2 EPS up 20% to $2.20, revenues up 6% to $104.590 billion

FY 08 EPS up 17% to $8.54, revenues up 38% to $556.447 billion, net income up 10% to $44.633 billion

Source: Thomson Reuters

Year-ago actuals: Q1 EPS $1.62, Rev. $87.223 billion, Net Income $9.280 billion

*All estimates are current as of 4/30 and subject to change.*

FACTOIDS:

RANGE-BOUND - Despite record profits, ExxonMobil shares have been range bound for the last nine months. On July 24, XOM closed above $90 for the first time ever. Since then the stock has bounced between $80 and $95. XOM is currently near the top of that range.

EXXONMOBIL ALL-TIME HIGHS - ExxonMobil's all-time intraday high is $95.27, hit on Oct. 17. XOM set its closing high of $95.05 on Oct. 18. The company's most profitable quarter was Q4 of last year: it had net income of $11.660 billion.

ONE-TIME ITEMS EXCLUDED - Analysts normally exclude all one-time items from the "adjusted" EPS figure.

REVENUES - For a number of reasons, revenue numbers of integrated oil companies do not get a lot of attention. Even though there are 18 analysts with EPS estimates for ExxonMobil, just two analysts put out revenue forecasts. Bottom line is: focus on the bottom line... as well as refining margins, reserves and the outlook for the rest of the year.