Exxon Mobil 1Q profit up 17 pct, Wall Street expected more
Thursday May 1, 11:46 am ET
By John Porretto, AP Business Writer
Lifted by record crude prices, Exxon Mobil 1Q profit rises 17 pct but disappoints Wall Street
HOUSTON (AP) -- Exxon Mobil Corp., the world's largest publicly traded oil company, said Thursday that record crude prices helped its first-quarter profit climb 17 percent to $10.9 billion -- the second-biggest U.S. quarterly corporate profit ever.
But the results still fell short of Wall Street's lofty forecasts, and Exxon Mobil shares fell more than 4 percent in morning trading.
The company's refining operations limited its overall earnings growth, because prices for crude oil rose even faster than the increase drivers see at the gasoline pump.
Lower production to start the year hurt too.
Exxon Mobil, based in Irving, Texas, said earnings for the first three months of the year came to $2.03 per share, up from $9.3 billion, or $1.62 per share, a year ago.
Analysts polled by Thomson Financial were looking for $2.13 per share.
But at $10.9 billion, the profit still ranks as the second-biggest for a U.S. company -- the only larger result in a three-month period was the $11.7 billion Exxon Mobil posted in the final three months of 2007.
Revenue rose to $116.8 billion from $87.2 billion a year earlier. Analysts were looking for revenue of about $124 billion.
Exxon Mobil shares fell $4.35, or 4.7 percent, to $88.72.
The company said earnings at its exploration and production, or upstream, business rose 45 percent to $8.8 billion, lifted by higher oil and natural gas prices. Increased natural gas production was more than offset by lower crude volumes.
Overall production fell 5.6 percent from a year ago, in part from natural field declines and maintenance.
On the refining and marketing side, earnings were off 39 percent from a year ago to nearly $1.2 billion. The company said significantly lower worldwide refining margins reduced earnings by about $1 billion in the quarter. Those margins reflect the difference between the cost of crude and what the company makes on refined products such as gasoline.
Crude prices averaged nearly $100 a barrel in the first quarter, up from roughly $58 a barrel a year ago. Analysts have attributed the spike to growing global demand, speculative trading and a weak dollar, among other factors.
Crude has pushed even higher since, reaching a record $119.93 per barrel this week.
Meanwhile, gasoline prices also are reaching new highs -- and creating financial stress for many Americans. The national average price of a gallon of regular gas rose past $3.60 Wednesday.
Already, record crude prices have produced bountiful first-quarter profits for several other major oil companies, despite higher costs and lower results from refining.
BP PLC and Royal Dutch Shell PLC, Europe's two biggest oil producers, posted combined profits of nearly $17 billion earlier this week -- $7.6 billion for BP, $9.08 billion for Shell. BP's earnings surged 63 percent from a year ago; Shell's rose 25 percent.
Last week, ConocoPhillips reported a 16 percent rise in net income to $4.14 billion. Like BP and Shell, the third-biggest U.S. oil outfit far outpaced industry expectations.
Chevron Corp., the No. 2 U.S. oil company, is expected to continue the trend when it reports first-quarter results Friday.