In this article, we discuss 5 earnings that surprised Wall Street this week. If you want to see more companies that posted noteworthy earnings recently, click 10 Earnings that Surprised Wall Street This Week.
5. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 83
Exxon Mobil Corporation (NYSE:XOM) is a Texas-based producer of crude oil and natural gas. On July 29, the company posted Q2 non-GAAP earnings per share of $4.14, beating market estimates by $0.25. Exxon Mobil Corporation (NYSE:XOM)’s revenue of $115.68 billion rose 70.8% year over year, beating Street consensus by $4.01 billion. The company generated earnings of $17.9 billion and cash flow from operating activities came in at $20 billion in Q2 2022 on the back of higher production, increased realizations and margins, and robust cost control. As of July 29, the company has posted a 52.55% year to date share price gain.
HSBC analyst Gordon Gray on July 20 raised the price target on Exxon Mobil Corporation (NYSE:XOM) to $97.50 from $92.50 and kept a Hold rating on the shares. The integrated oil sector’s 10% correction in the last month leaves valuations looking attractive as prices of both oil and gas will remain robust even in the face of future demand weakness, the analyst told investors.
Among the hedge funds tracked by Insider Monkey, 83 hedge funds were long Exxon Mobil Corporation (NYSE:XOM) at the end of Q1 2022, up from 71 funds in the prior quarter. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 51.80 million shares worth roughly $4.30 billion.
Here is what Goehring & Rozencwajg Associates has to say about Exxon Mobil Corporation (NYSE:XOM) in its Q3 2021 investor letter:
“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.
What should Chevron expect?
It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publicly expressed concerns about both projects.
According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”
