ExxonMobil's Q1 Earnings on Deck: Should You Stay Invested or Exit?

Core Viewpoint - Exxon Mobil Corporation (XOM) is expected to report a decline in first-quarter 2025 earnings, with a consensus estimate of $1.72 per share, reflecting a 16.5$84.5 billion, indicating a 1.7% increase from the year-ago figures [1]. - XOM has beaten earnings estimates in three of the last four quarters, with an average surprise of 1.8% [2]. - The company has a positive Earnings ESP of +1.62% and a Zacks Rank of 3 (Hold) [3]. Upstream Earnings and Market Conditions - XOM anticipates a sequential increase in upstream earnings for the March quarter by up to $800 million, attributed to favorable oil and gas prices [4]. - The average WTI spot prices for January, February, and March 2025 were$75.74, $71.53, and$68.24 per barrel, respectively, which are significantly above break-even prices in shale plays [4]. Energy Products Business - The Energy Products business unit is expected to see a sequential improvement of $300-$700 million due to changes in industry margins [5]. Stock Performance and Valuation - XOM's stock has decreased by 3.4% over the past year, outperforming the industry decline of 9.1% [8]. - The company's trailing 12-month EV/EBITDA ratio is 6.76, indicating it is trading at a premium compared to the industry average of 4.02 [10]. Strategic Developments - The acquisition of Pioneer Natural Resources enhances XOM's production capabilities in the Permian Basin, known for low production costs [12]. - XOM is investing in alternative energy projects, such as carbon capture and lithium battery technology, which present potential growth opportunities despite requiring substantial capital [14]. Competitor Analysis - Chevron (CVX) is also set to report first-quarter 2025 earnings on May 2, with an Earnings ESP of -5.51% [15]. - BP has reported first-quarter 2025 adjusted earnings of 53 cents per share, missing the consensus estimate and declining from the previous year's figure [16][17].