Refining & marketing and chemicals results among the big oil companies could hurt fourth quarter earnings, and Barclays analyst Paul Cheng thinks consensus estimates are still a little too optimistic for the sector.
“While the major oil companies’ 4Q11 result should be helped by slightly stronger-than-expected oil prices, results will not be immune from the shortfall in their downstream and chemical results as well as the weakness in the North America gas market. Among the Big 3, we think Conoco Philips (COP) will likely report a somewhat bigger miss than Chevron (CVX) and Exxon Mobil (XOM) due to its relatively heavy exposure in refining and North America gas market.”
Also, Exxon’s earnings may not be the highest quality, which could hurt shares when the company reports earnings, writes Cheng.
“In addition, while we think XOM will report results in line or exceed expectations, the earnings quality may not be the highest since we think the result will include several hundred million of asset sales gain related to the closing of the Apache North Sea sales.”
No comments:
Post a Comment