By Chelsey Dulaney
Exxon Mobil Corp., the biggest and richest U.S. oil company,
reported its lowest earnings in six years on Friday as bigger
profits from refining couldn't offset plunging earnings in its
exploration and production business.
Shares of Exxon Mobil tumbled as much as 5% on Friday to their
lowest level since mid-2012. Recently, shares were down 4.7% to
$79.11.
Exxon also said it would again scale back its share buybacks
during the current quarter to a level of $500 million. Exxon bought
back $1 billion in shares in the second quarter, which was down
from its previous level of about $3 billion in buybacks each
quarter. Stock repurchases are popular with investors because they
shrink the number of shares available to the public and tend to
make them more valuable.
In a news release, Chief Executive Rex Tillerson said results in
the latest quarter "reflect the disparate impacts of the current
commodity price environment."
Profit in the exploration and production, or upstream, business
plunged 74% to $2.03 billion in the latest quarter, as its U.S.
division swung to a loss.
The average price Exxon realized in the U.S. for crude fell to
$54.06 a barrel from $98.55 a barrel a year earlier. For natural
gas, average U.S. price fell to $2.31 per thousand cubic feet from
$4.46 a year ago.
Exxon's production improved 3.6% to 4 million oil-equivalent
barrels a day.
But the Irving, Texas, company was again been helped by fatter
profits in its downstream and chemicals divisions, which are being
boosted by low prices for oil and gas. In the latest quarter, Exxon
made more from those divisions than from pumping oil and gas for
the first time since at least 2000.
Refining and marketing earnings, or downstream, more than
doubled to $1.51 billion from $711 million a year earlier. Exxon
cited stronger margins for the increases. The chemical segment
earnings improved 48% to $1.25 billion as lower feedstock costs
boosted margins.
In all, Exxon reported a profit of $4.19 billion, or $1 a share,
down from $8.78 billion, or $2.05 a share, a year earlier. Revenue
fell 33% to $74.11 billion.
Analysts polled by Thomson Reuters expected a per-share profit
of $1.11 and revenue of $72.48 billion.
Capital spending fell to $8.26 billion from $9.8 billion a year
earlier.
Exxon has moved to conserve cash in a sign that it doesn't
expect a quick rebound in crude prices. The company has announced
it would slash its capital spending by this year and reduce its
stock buybacks in the near term.
Chevron Corp., the second-biggest U.S. oil company in market
value behind Exxon, on Friday said its profit tumbled to its lowest
level since 2002 in the second quarter as the oil company took more
than $2 billion in impairments and charges to suspend projects amid
lower crude-oil prices.
Shares of Chevron fell 4.6% to $88.75 a share in morning
trading.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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