Energy giant ExxonMobil (NYSE:XOM) provided an update on its fourth-quarter operating results. The company expects to incur an impairment charge to range between $2.4 billion and $2.6 billion for its Californian assets in the fourth quarter.
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The impairment charge is related to the company’s oil and gas properties in Santa Ynez and related facilities in California. After a 2015 pipeline leak, the company temporarily halted production at the Santa Ynez field. Following this, regulatory restrictions kept Exxon Mobil from resuming crude shipments, citing environmental risks.
In terms of fourth-quarter results, XOM expects a 30% year-over-year fall in net profit to about $8.9 billion. This is because the company expects lower oil prices to have impacted its Q4 earnings by $400 million to $800 million. At the same time, higher natural gas prices are likely to have increased operating profits by about $600 million.
Exxon Mobil is expected to announce its fourth quarter and full-year 2023 results on February 2.
What is the Future of XOM Stock?
The current geopolitical tensions in the Middle East and production cuts are expected to keep oil prices higher, thereby benefiting Exxon Mobil’s top line. Further, the company’s expansion into the lithium market and recent acquisitions keep it well poised for growth.
Analysts remain cautiously optimistic about Exxon Mobil stock, with a Moderate Buy consensus rating based on 12 Buys and seven Holds. The average XOM price target of $127.83 implies an upside potential of 24.9% at current levels. Shares of the company have slid by over 3% over the past year.
