ExxonMobil (XOM 0.94%) expects to post strong results for the third quarter. The oil giant recently gave investors a preliminary glimpse into those numbers. While the recent slump in oil prices will see its profits decline from its blowout second-quarter results, the company still expects to produce gushing profits.

Exxon's ability to produce strong profits amid a slide in oil prices is great news for investors. Meanwhile, with the prospects for crude oil growing brighter following OPEC's recent announcement, the oil stock could have more upside ahead.

Drilling down into Exxon's numbers

Exxon recently revealed its preliminary third-quarter results. The oil giant sees its earnings coming in at around $11 billion before any asset-impairment charges. While that's down sharply from the $17.9 billion earnings gusher it posted in the second quarter, it's well ahead of the $6.8 billion it earned in last-year's third quarter.

Oil prices fueled Exxon's robust results in the second quarter. However, natural gas was the star in the third quarter. The company sees a positive impact of $1.8 billion-$2.2 billion, fueled by a rise in U.S. natural gas prices from $7.17 per MMBtu to $8.47 per MMBtu during the past quarter.

That helped offset a slide in crude prices from an average of $109 per barrel in the second quarter to $98 in the third quarter. This decline will likely result in Exxon's earnings from liquids falling by $1.4 billion-$1.9 billion. Meanwhile, falling margins in the company's refining and chemicals businesses will further drag profits down by $2.7 billion-$2.9 billion in the period. 

These numbers don't include the impact of several items, including foreign-exchange fluctuations and unscheduled downtime. Because of that, the company's final earnings could differ from these preliminary numbers. Exxon expects to report its official results on Oct. 28.

The fuel to continue creating value

Exxon's ability to post strong numbers amid the third-quarter slide in oil prices showcases the benefits of its integrated energy business. It was able to offset some of the declines in crude prices, thanks to the strength of its natural gas operations. That's also allowing the company to continue generating strong earnings and cash flow, giving it the financial flexibility to grow shareholder value.

Exxon is investing heavily to expand its traditional and new energy sources. The company has several projects underway to boost its oil and natural gas production. Meanwhile, it's investing in the single largest U.S. refining-capacity addition since 2012. At the same time, Exxon is investing to slowly transition its portfolio to a lower-carbon future by growing its carbon capture and storage, biofuels, and hydrogen capacity.

The company is also increasing shareholder distributions and reducing debt. Its debt-to-capital ratio was 20% at the end of the second quarter, at the low end of its target range. Meanwhile, when adding in its $18.9 billion cash balance, the net ratio was 13%.

The company also returned $7.6 billion of cash to shareholders in the period, including $3.7 billion of dividends. The Dividend Aristocrat has increased its payout for 39 straight years. The company's strong showing in the third quarter will only further strengthen its balance sheet and ability to return capital to shareholders. 

An upside catalyst ahead?

While oil prices cooled off in the third quarter, they've started to rebound and could continue heading higher. The primary catalyst is OPEC's surprising move to slash its output by 2 million barrels per day.

That action has already helped lift oil from its recent bottom of around $80 a barrel to over $90. Crude could continue rising, especially if an expected global recession doesn't impact demand as much as many anticipate, or the industry experiences an unexpected supply issue.

Given Exxon's extensive exposure to crude prices, it will benefit from OPEC's move. Higher oil prices will enable Exxon to generate more cash, enhancing its ability to return capital to shareholders and continue strengthening its already top-tier balance sheet. Those factors should help boost its stock price.

OPEC's move could help fuel Exxon's stock

Exxon expects to produce another earnings gusher in the third quarter, fueled partly by higher natural gas prices that helped offset a slide in crude prices. Because of that, it also likely delivered another cash flow gusher, further enhancing its financial flexibility and balance-sheet strength.

Meanwhile, there's a good chance crude prices could rebound in the coming quarters after OPEC's recent decision to slash its output. That could give Exxon's stock the fuel to head higher. The company's resiliency and upside potential make it look like a compelling oil stock to consider buying these days.