Exxon Mobil’s stock rallies after profit and free cash flow beat expectations, while revenue fell well short

Shares of Exxon Mobil Corp.
XOM,
-0.41%
rallied 1.9% in premarket trading Friday, after the oil and gas giant reported fourth-quarter profit and free cash flow that beat expectations even as revenue fell well short. Net income dropped to $7.63 billion, or $1.91 a share, from $12.75 billion, or $3.09 a share, in the year-ago period. Excluding nonrecurring items, such as a $2 billion impairment resulting from regulatory obstacles in California, adjusted earnings per share of $2.48 beat the FactSet consensus of $2.20. Total revenue dropped 11.6% to $84.34 billion, well below the FactSet consensus of $90.03 billion, as upstream production was essentially flat and energy products sales declined 1.2%. Free cash flow dropped 35% to $7.97 billion but topped the FactSet consensus of $7.77 billion. The stock has lost 6.2% over the past three months through Thursday, while the Energy Select Sector SPDR ETF
XLE,
-0.01%
has shed 4.8% and the S&P 500
SPX,
+1.25%
has rallied 13.6%.