ExxonMobil Holdings (NYSE: XOM) posted net income of $14.5 billion for the second quarter, more than double the $7.1 billion profit it had a year ago. Chevron's (NYSE: CVX) net income of $12 billion for the quarter was almost 400% higher than the year-ago quarter. Chevron beat Wall Street's earnings estimates by $0.50 a share, at $6.06.
Exxon, meanwhile, fell $0.08 short of estimates, posting adjusted earnings of $3.52 a share. The company said difficulties in its refining business were to blame. This Rare Signal Is Flashing Again.
In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Still, the increase in net income at the two oil behemoths is stunning.
And both companies handily beat analysts' revenue estimates. Of course, higher oil prices resulting from the war in the Persian Gulf and the closure of the Strait of Hormuz, through which about one-fifth of the world's oil flows, are a huge part of that. And both companies seem to be firing on all cylinders.
So, the question is, which one is the better investment right now? I recently wrote about how refining stocks are having a banner year. They're up about 58% year to date, as measured by the VanEck Oil Refiners ETF (NYSEMKT: CRAK).
That's because there's a global shortage of refining capacity, which drives up the prices of products like gasoline and jet fuel and increases refiners' profit margins. ExxonMobil and Chevron are not in that ETF, as it's a pure play on refining, holding only companies that generate at least half of their revenue from oil refining. That said, both oil majors have major refining operations in addition to their upstream (exploration and extraction) and marketing and sales operations.
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