Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
ExxonMobil (NYSE: XOM ) is up 1.7% as of 1:30 p.m. EDT, while the S&P 500 (SNPINDEX: ^GSPC ) is unchanged at 1,763 after yesterday's Federal Open Market Committee statement. The largest exchange-traded fund tracking the S&P 500, the SPDR S&P 500 (NYSEMKT: SPY ) , is unchanged as well.
Oil prices are down today, with WTI crude down 0.3% to $96.49 and Brent crude down 1% to $108.77. Oil prices continue to slide, especially in the U.S. as oil stockpiles continue their rise.
ExxonMobil is up after reporting better-than-expected earnings and production data last night. Earnings per share were $1.79, down 18% from last year but better than analyst expectations of $1.77 per share. Revenue was $112.4 billion, down 2.4% year over year from $115.4 billion but above analyst estimates of $107.4 billion. Production was up 1.5% -- the company's first year-over-year increase since Q2 2011 -- to an average of 4 million barrels of oil equivalent a day. With increased production and high oil prices, what hurt Exxon? Refining.
Refining earnings were down 80% year-over-year to $590 million, down from last year's $3.2 billion. The steep decline in refining margins due to an oversupply in the refining industry was one of the many reasons ConocoPhillips (NYSE: COP ) and Marathon Oil spun off their refining operations, creating Phillips 66 and Marathon Petroleum. Exxon's current struggles make their spinoff moves look all the more prescient.
Still, ExxonMobil is a highly disciplined capital-allocator. They have proven their ability to effectively manage capital over the long term.
If Exxon's management believes keeping the company vertically integrated is better in the long run, I give them the benefit of the doubt.