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.