To put it bluntly, this is a quarter that Exxon Mobil (NYSE:XOM) and its investors may want to forget about. It truly was a mess across a variety of metrics, operations, and overall profits/revenues. It certainly wasn’t the Exxon of old or just a few quarters ago. Perhaps, what’s troubling is that several rivals have managed to report better numbers and make some serious strategic moves. At the same time, longer-term investors may not want to count out XOM stock.

The recent earnings-related dip in Exxon stock has made shares the cheapest they’ve been in years. Meanwhile, the integrated giant still offers plenty of ways to win organically and its hefty cash, treasury stock/credit lines make M&A very well possible.

In the end, Exxon’s poor earnings today could be a great chance to buy the stock for the longer term.

What Went Wrong At Exxon

Exxon Mobil’s problems began in its refining segment. Turning crude oil and natural gas into gasoline and other chemicals have been a real bright spot over the last decade or so, as these refining assets have been able to feast on the lower feedstock costs. Meanwhile demand — thanks to a growing world economy — has been steadily rising. This created amazing margins that helped cover-up some of the issues in the exploration segment.

Unfortunately for Exxon, those margins and their benefits disappeared this quarter.

Because of weakness in the refining segment, as well as poor price realizations for its production segment, XOM only managed to generate around $2.35 billion in profits. That’s only about half of what the energy stock made in during the year-ago quarter and below analyst estimates. Likewise, revenue also took a huge hit, sinking 6.7% year-over-year. Both of these widely missed analyst expectations.

To make matters potentially worse, Exxon had some trouble with its cash flows.

For the quarter, XOM managed to pull in $8.3 billion in operating cash flow. Backing out expenses and other charges, free cash flow only hit $2.5 billion. That’s nothing to sneeze at and most firms would be envious to realize that level of free cash flow. The only problem is that over the quarter, XOM stock holder distributions weren’t covered with its free cash flow. That’s not necessarily a path it wants to go down for very long.

With all the negatives, it’s no wonder why Exxon stock fell more than 2.2% on the news and has been drifting lower in the days since.

Still Plenty Right For Exxon

There was plenty right with the quarter, as well. For one thing, Exxon is killing it on the production side of the equation. And that could be one of the biggest positives of all.

Declining production was a huge problem for the major energy stocks in the early years of this decade. This included Exxon. However, XOM seems to have righted the ship, as evidenced in this latest quarter. Thanks to prolific low-cost shale production, Exxon oil production grew 5% year-over-year. That’s big for an energy firm of this size. Much of that came from its 140% growth in the Permian Basin.

The Permian is one of the most-expansive shale formations and features some of the best geology in the entire country. Exxon has about a 10 billion barrels worth of reserves in the region and currently has plans to expand its production to more than 1 million barrels per day by 2024. As the quarter showed, this oil still churns an operating portfolio at low prices, something that should come as a huge comfort for Exxon stock investors over the long haul.

Secondly, despite its cash flow woes, Exxon still has one of the best balance sheets in the business. Today, long-term debt makes up just 9% of its capital structure. Meanwhile, the firm has nearly $225 billion in treasury stock on its balance sheet. Both of these factors make it easy for the firm to add additional debt or issue stock to fund expansion projects or even pay its dividend, something that rivals like ConocoPhillips (NYSE:COP) couldn’t do when the oil market got tough — sort of like it is now.

Speaking of that dividend, Exxon did make amends with investors for its “meh” quarter by hiking its payout by more than 6%. That kept the streak of 37 years’ worth of dividend hikes alive.

Bottom Line on Exxon Stock

So, yes. Exxon had a bad quarter. But the reality is, the energy giant is able to get through the malaise just fine and in the longer term, it could do very well. Perhaps the best part is that XOM stock is trading at some of its best valuations in years.

The firm has a had a banner year, but the recent dip has left it dirt cheap on a number of metrics. When looking at a forward P/E, XOM clocks in at just 14x. That’s much lower than the broader market and many of its rivals. Meanwhile, looking at its book value, Exxon Mobil stock today trades at near 30-year lows. Speaking of 30-year periods, Exxon’s dividend yield — currently 4.33% — hasn’t been this high since the 1990s. All of this points to one heck of a deal for longer-term investors.

While the quarter was an overall bust, the longer-term growth story at Exxon — shale production and its ability to profit in low price environments — is still very much alive. XOM stock investors now have the ability to score it at a huge discount.

Disclosure: At the time of writing, Aaron Levitt did not have a position in any of the stocks mentioned.