Exxon Slides For Fourth Consecutive Session After Earnings Slightly Below Consensus

Published on Tuesday, 31 January 2012 13:15 Written by J Hawk

New York, January 31^st (TradersHuddle.com) – Irving, Texas based Exxon Mobil Corporation (NYSE:XOM) released earnings results earlier today that showed solid profits for the world’s largest publicly traded petroleum and petrochemical company. Furthermore, the firm’s gains were only slightly less than the consensus of market analysts’ expectations for its fourth quarter earnings, which rose respectably compared with its operating profit results seen in the fourth quarter of 2010. 

According to the company’s earnings report, Exxon Mobil reported earnings of $9.4 billion in the last quarter of 2011 that concluded on December 31^st.  That number amounts to Q4 2011 earnings of $1.97 per common share, assuming dilution, which was just a bit below the consensus of $2.01 per share, according to a survey of fifteen analysts performed by Zacks Investment Research.

On balance, the stock market responded to Exxon Mobil’s latest earnings news by taking its shares mildly lower. After the announcement, Exxon Mobil’s stock was marked gradually softer by the market to trade at $84.4278 as of this writing, showing a modest loss of -1.24% on the day or $-1.0622 in more active than usual trading of 5.6 million shares on the New York Stock Exchange.

Exxon Mobile CEO Tillerson Shows Confidence as Oil Production Rises in 2011, but Declines in Q4

Exxon Mobil CEO Rex Tillerson sounded confident about his firm’s performance and future, noting that, “ExxonMobil recorded strong results while investing at record levels to develop new supplies of energy that are critical to meeting growing world demand, and supporting economic recovery and growth.”

Tillerson also pointed out that, “Capital and exploration expenditures were a record $36.8 billion in 2011”, and that “Oil-equivalent production was up 1% from 2010. Excluding the impacts of entitlement volumes, OPEC quota effects and divestments, production was up 4%.”

Nevertheless, the firm reported a decline in oil-equivalent production of 9% for Q4 2011 compared to 2010’s fourth quarter. In addition, excluding the effects of entitlement volumes, OPEC quota effects and divestments, production was down 4% for the same comparison period.

Exxon Details Stock Buy Back Plan

The firm also announced the details of its common stock repurchasing program. For Q4 of 2011, Exxon Mobil bought back 69 million common stock shares at a total expense of $5.4 billion.

Of that amount, $5 billion was spent to lower the quantity of outstanding shares. The remaining amount of roughly $400 million was used to issue shares to Exxon Mobil staff as part of the firm’s benefit programs.

The Technical Picture for Exxon Mobil Remains Bullish Despite Recent Pull Back

From a technical perspective, Exxon Mobil’s share price has shown a long term upwards trend, with a notable recent correction in 2008 through 2010, that bottomed out in mid-2010 just ahead of the $55 region.

Nevertheless, after peaking at its 52-week high point of $88.13 on May 2^nd of 2011, the stock then traded correctively lower during the rest of the first half of 2011 to hit a low of $67.03 on August 9^th. XOM then started to rise steadily once again after forming a base ahead of the $67 region during August and September of last year.

In recent trading sessions, the stock has almost recovered to its 52-week peak by trading up to the $87.94 level on January 23^rd, before selling pressure emerged ahead of resistance at the $88.13 level. This took the stock correctively lower to the $83.46 level seen today, breaking support at the $83.82 level in the process.

Initial resistance is noted at $83.82 and in the $87.94/$88.13 region, while support for the stock shows initially at $82.20, $81.81, $79.95 and $78.66, and below that at $77.03, $75.45 and $73.90.