Exxon Mobil 2012 1Q financial analysis

 Exxon Mobil 2012 1Q results looks quite stable. Although these was a visible decrease at Q4 in revenue in Q 1 decrease has stoped and showed some increase driven mostly by high oil prices which IMF estimates that will stay high during all Y2012. Quarterly revenue has increased up to 119 bn.$ compared to 109 bn.$ (Δ+9%) last year or to 116 bn.$ (Δ+3%) at Q4. Tough Net earnings before depreciations which are more importand has decreased to 13,3 bn.$ from  14,4 bn.$ (Δ-8%) last year or to 13,5 bn.$ (Δ-2%) at Q4 which is not good, but if looking at longer perspective earning increase is visible compared to Y2010.

Companies main market is United states which hold ~1/3 of companies revenue. Other revenue is not relieved but by studding sales of oil, gas and petrol in tones Asia Pacific and Europe should be about equal and around 1/4. Since Europe holds only ~1/4 of companies sales its recession should not impact companies growth driven by US and Asia markets. Main part of companies revenue and also earnings come from Downstream ~83% In general companies results are slightly negative.

Companies balance structure is not the perfect one. Equity level is below 1/2 and is decreasing over pas few quarters and now has reached 46% which is not a good sing. Liquidity ratio is also below 1, good thing that it is very near the 1 line, but still it remain below which is risky thing. Return on equity is around 12%.

Inventory turnover is only 12 days while Receivable turnover is also good ~30 days. Companies investments into long term property was ~8 bn.$ , while it was 31 bn.$ in Y2011 or ~55% of companies generated earnings before depreciation. Share repurchase spending are also stable at ~5 bn.$/quarter or ~20 bn.$ at Y2011 or 36% of companies earnings. Dividend payments cost ~9 bn.$/year or only 16%, if calculating announced dividend increase it would be ~11 bn.$/year or still only 19%. Share repurchase and dividend spending takes out 55% of total companies earnings which is not a good level taking into account that other companies like IBM or Intel spends more on this activity then they actually earn. Either way it would be lovely to see slight increase in equity level just over 50% and decrease short term liabilities so that they would be lower then short term asset. No other major changes at the balance sheet. In general companies balance structure is a bit risky.

Share value:

Equity / share	157 bn.$	4,676 bn.	33,6 $/sh.
Market value	83,3 $	+49,7$	4,2 years
Year Net income before Depreciation	55,5 bn.$	+11,9$/sh.	14,2%

 

Companies share basic value is ~33,6$ (32,8$ compared to 4Q).  Current market price is ~83$ (86$), which shows that market is paying ~18,5$ more or 4,2 years (4,4 years) of Net income before Depreciation earnings  55,5 bn.$/year or 11,9$/share. Companies shares market evaluation is good. Share profitability (Share market price/Net income before Depreciation) if not calculating goodwill write-off  is 14,2% (14%) which is also good.

Company pays 0,57$/share/quarter dividend or ~2,7% (2,2%) dividend yield which is good, with dividend payout ratio ~19% which is a very good level with a lot of reserve. Company has increased its dividend payments up from 0,47$ to 0,57$ or by +27% compared to last year. Companies cash flow management can be considered as well balanced.

Analysis source: Exxon Mobil 2012 1Q financial results

Previous analysis: Exxon Mobil 2011 4Q financial analysis

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