Chevron and ExxonMobil earnings are scheduled to be released Friday, July 27. Here’s a look at what might be expected from the oil supermajors’ second-quarter results.
Around the upcoming earnings release, options trader have priced in a 2.3% stock move in either direction, according to the Market Maker Move indicator on the thinkorswim® platform. Implied volatility was on the lower end at the 39th percentile as of this morning.
In recent trading at the July 27 weekly expiration, volume has been higher on the call side, but there hasn’t really been much activity that stands out for both calls and puts. Overall, trading has been spread out across a range of strikes mostly around the money. The same was true for the next several weekly expirations.
Looking further out at the August 17 monthly expiration, calls have been active at the 125 strike price, with a decent amount of trading at the 130 strike as well. Volume on the put side has been lighter, with most of the activity at the 124 and 125 strikes.
Note: Call options represent the right, but not the obligation, to buy the underlying security at a predetermined price over a set period of time. Put options represent the right, but not the obligation to sell the underlying security at a predetermined price over a set period of time.
When XOM reports, adjusted EPS is expected to come in at $1.24 and revenue at $72.58 billion, according to third-party consensus analyst estimates. In the same quarter last year, XOM reported adjusted EPS of $0.78 on revenue of $62.88 billion.
In Q1, XOM reported that production had decreased 6% year over year to 3.9 million barrels. XOM has reported production declines in eight out of the past 10 quarters. Still, the Upstream segment generated $3.5 billion in earnings, up from $2.25 billion in Q1 2017. That increase was almost entirely driven by higher prices, according to management.
One of the reasons for XOM’s recent decline in production was the devastating earthquake in Papua New Guinea. Management originally said they expected to be able to return to full production by May, but analysts have said they expect the impact from the earthquakes to pressure results in the second quarter.
XOM reported that earnings in its Downstream and Chemical Segments were both down 15.8% year over year, driven by lower margins on some products and higher expenses, according to the company. Analysts have said they expect similar trends to persist in Q2.
XOM hiked its quarterly dividend payment by five cents to $0.82 per share. Its current yield is about 3.9%.
Options traders have priced in a 2% stock move in either
direction around XOM’s upcoming earnings release, according to the Market Maker
Move indicator. Implied volatility was at the 47th percentile as of
In short-term trading at the July 27 weekly expiration,
calls have been active at the 83.5 and 84 strike prices, while puts have been
active at the 82 and 82.5 strikes, pretty much surrounding where the stocks
been trading these past few weeks.
At the August 17 monthly expiration, trading on the call
side has been concentrated at the 85 strike price. On the put side, trading has
been heavier at the 80 and 82.5 strikes.
Caterpillar (CAT) kicks things off next week with its earnings report before the open on Monday, July 30. Some of the other reports on tap include Apple (AAPL) after the close Tuesday, July 31; Tesla (TSLA) after the close on Wednesday, August 1; and MGM (MGM) before the open Thursday, August 2, with Activision Blizzard (ATVI) scheduled after the close the same day.
The Fed’s July meeting is also coming up July 31 to August 1, and July’s employment report is due out in the morning on Friday, August 3. So there’s a lot coming up to consider keeping an eye on. For a look at what else is going on, check out today’s Market Update if you have time.
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