Exxon Mobil Corp produced its weakest quarter in more than 16 years as lower oil prices pushed its profit down by 63 percent.
Revenue tumbled 28 percent, and the oil giant lost money in its vaunted exploration and production business despite a 2 percent increase in production. However, it made more money in chemicals.
Exxon continued to slash capital spending to cope with lower prices, which this week cost the company the perfect “AAA” credit rating that it had held for more than six decades.
The company on Friday said that it earned US$1.81 billion in the first quarter, down from US$4.94 billion a year earlier. It was Exxon’s smallest quarterly profit since it earned US$1.5 billion in the third quarter of 1999, according to FactSet figures.
On a per-share basis, the Irving, Texas-based company said it earned US$0.43 per share, which beat Wall Street expectations. Nine analysts surveyed by Zacks Investment Research and 20 analysts surveyed by FactSet had forecast an average of US$0.31 per share.
Revenue fell to US$48.71 billion, but topped forecasts. The FactSet analysts expected US$44.75 billion.
The company lost US$76 million in its exploration and production business because of an US$832 million loss in the US. A year ealier, the so-called upstream business earned about US$2.9 billion on a much smaller US loss of US$52 million.
Exxon’s refining and fuels-marketing business was profitable, but not as much as a year earlier partially due to weaker margins on refining.
However, the chemical business earned US$1.4 billion, an improvement of US$373 million over the same period last year.
Exxon cut capital spending 33 percent, to US$5.1 billion, down 33 percent from the first quarter of last year.
This week Standard & Poor’s downgraded Exxon’s credit one notch, to “AA+”. Exxon had been one of just three US corporations with the top “AAA” rating, but S&P said it downgraded Exxon because of lower energy prices and continuing high dividend payouts.
The next day, the company raised its dividend for the 34th straight year — but by just 3 percent.
Meanwhile, Chevron Corp reported a loss of US$725 million in the first quarter, joining the growing list of petroleum giants that finished the period in the red. Revenues dropped 31.8 percent year-on-year to US$23.6 billion.
Besides its worst showing since 2002, Chevron also raised the number of jobs it expects to cut this year from 7,000 to 8,000.
Earlier this week, both BP PLC and ConocoPhillips Co reported losses in the first quarter.
Like other oil giants, Chevron has slashed its capital budget in the wake of plunging oil prices. It reported production of 2.67 million barrels per day in the first quarter, nearly the same as last year’s 2.68 million barrels per day.
Chevron’s loss translated into US$0.39 per share, compared with analyst expectations for a loss of US$0.20 per share.
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