One of the highest-yielding companies on the Dow Jones Industrial Index, Exxon Mobil Corporation (NYSE:XOM) investors are eagerly awaiting the company’s third-quarter earnings release coming up at the end of this week.
Much anticipation is focused on how the company has performed over the previous quarter amid oil prices which have remained robust amid reports that crude inventories have continued to decline in the U.S. and slow but steady global growth in demand for oil.
Exxon Mobil has planned for a $22-billion capital expenditure budget for 2017, and indications are that the company will report higher capital expenditures for the third quarter, given limited spending in the first two quarters for the energy producer.
Much of the investment is slated to be rolled out in the company’s projects in the Permian basin, a growing segment of the company’s overall business model, and one which is expected to produce strong long-term cash flows for the company.
With capex expected to increase, free cash flow from the third quarter may remain constrained, although the expectation from many analysts is that the fundamentals underlying expected investment from Exxon Mobil will be scrutinized with much more zest in this upcoming earnings release.
The purchase of 22,000 acres of land in the Permian basin in September is likely to play into how future cash flows are assessed by investors over the coming week.
I anticipate that while short-term volatility will remain with Exxon Mobil, the company will announce promising initiatives which should boost long-term sentiment from investors about the company’s prospects and dividend, given the company’s attractive yield of 3.7%.
Invest Wisely, my friends.
