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.
