Exxon Mobil is Thursday's IBD Stock Of The Day as the oil giant has consistently outperformed a turbulent market this year.
The Irving, Texas, based multinational is diversified across much of the petroleum industry spectrum. Operations range from exploration and production of crude oil and natural gas, to refining and marketing of fuels and petrochemicals. Exxon is one of the largest publicly traded companies in the energy sector.
Exxon Mobil along with other gas and oil companies, including Chevron and Shell, has posted healthy profits in 2022. That growth has been due largely to the price of gasoline, which has outpaced the fast-rising costs of other goods and services.
Exxon Mobil's revenue in the first-quarter increased by 53% to $90.5 billion. The company also posted $2.07 earnings per share, a 218% increase from a year ago. The Q1 EPS excludes a $3.4 billion charge related to XOM's planned exit from Russia's Sakhalin-1 gas project in response to the Russian war against Ukraine.
Wall Street predictions for XOM's second-quarter include earnings per share of $2.94 and $91.5 billion in revenue, according to FactSet.
Political Pressure
However, Exxon Mobil has faced intense scrutiny from the White House in recent days. President Joe Biden has blamed oil companies for the rising price of gas. The average price of gas across the U.S. Thursday was $5.01, according to AAA data.
Last week Biden criticized Exxon for not increasing capital expenditures, and for keeping the oil supply low and gasoline prices high, as crude futures hover around $120 per barrel.
"We're going to make sure that everybody knows Exxon's profits," Biden told reporters during a visit to Los Angeles. "Exxon made more money than God this year."
Biden also penned a letter to executives at Exxon Mobil, Marathon Petroleum, Valero Energy and other oil companies and refiners. The president accused them of restraining refining levels, sending gasoline prices even higher, Reuters reported Wednesday.
There are also reports that Senate Democrats may back a 21% surtax on any oil company profits considered to be excessive, according to Reuters.
The Response
Exxon Mobil released a statement Wednesday, addressing Biden's critiques.
Exxon said that it has been in "regular contact" with the White House and has given the administration updates on how it has been "investing more than any other company to develop U.S. oil and gas supplies."
"We kept investing even during the pandemic, when we lost more than $20 billion and had to borrow more than $30 billion to maintain investment to increase capacity to be ready for post-pandemic demand," the company said in the statement.
Exxon Mobil added that the federal government could take measures to support oil companies and increase supply. The suggestions include waiving the Jones Act provisions. The Jones Act — the 1920 Merchant Marine Act — requires all goods shipped between U.S. ports to be transported by U.S. built and flagged vessels, crewed by U.S. citizens.
The oil giant also called on Biden to put in place policy that "supports U.S. resource development, such as regular and predictable lease sales, as well as streamlined regulatory approval and support for infrastructure such as pipelines."
Exxon Mobil Stock
XOM stock dropped nearly 4% to 91.39 in Thursday's market trading. XOM shares are testing support at their 10-week moving average, as they pull back after a five-week advance. The stock is finding support at the 10-week moving average. It is holding above an 89.90 buy point following a breakout in May.
Crude oil futures fell about 2% to around $113 per barrel early Thursday, a price not seen since early June. Prices rebounded later in the day to $118. This is still down from a June 14 high of $123. Crude oil has generally been on an upward trajectory since the beginning of last year. Prices angled sharply higher following Russia's invasion of Ukraine in February. Global backlash against the invasion led buyers to shun purchases of Russian oil.
Exxon Mobil has a best-possible Composite Rating of 99. Meanwhile, it has a 98 Relative Strength Rating, an exclusive IBD Stock Checkup measurement for share price movement with a 1 to 99 score, with 99 tops. The rating shows how a stock's performance over the last 52 weeks holds up against all the other stocks in IBD's database.
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