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Why Imperial Oil Ltd. Is up Over 1%

Imperial Oil Ltd. (TSX:IMO)(NYSE:IMO), Canada’s largest petroleum refiner, released its third-quarter earnings results this morning, and its stock has responded by rising over 1% in early trading. Let’s break down the quarterly results to determine if this could be the start of a sustained rally higher and if we should consider initiating positions today.

Breaking it all down

Here’s a quick breakdown of 10 of the most notable financial statistics from Imperial Oil’s three-month period ended on September 30, 2017, compared with the same period in 2016:

Metric Q3 2017 Q3 2016 Change
Revenues and other income $7,158 million $7,442 million (3.8%)
Net income (U.S. GAAP) $371 million $1,003 million (63.0%)
Net income per share (EPS) $0.44 $1.18 (62.7%)
Cash generated from operating activities $837 million $772 million 8.4%
Capital and exploration expenditures $159 million $205 million (22.4%)
Gross oil-equivalent production (barrels per day) 390,000 393,000 (0.8%)
Refinery throughput (barrels per day) 385,000 407,000 (5.4%)
Refinery capacity utilization 91% 97% (600 basis points)
Petroleum product sales (barrels per day) 500,000 505,000 (1.0%)
Petrochemical sales (tonnes) 196,000 242,000 (19.0%)

Should you be a buyer today?

It was a weak quarter overall for Imperial Oil, and its earnings came up short of the expectations of analysts polled by Thomson Reuters, which called for EPS of $0.46. That being said, I think the stock is only rising because so much negativity was already priced in during its 13.5% decline since the start of the year. Either way, it’s not a situation I’d want to risk money on.

With all of the information provided above in mind, I think Foolish investors should hold off on investing in Imperial Oil today and revisit it when it reports its fourth-quarter earnings results in early 2018 to see if things get better.

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Fool contributor Joseph Solitro has no position in the companies mentioned.

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