Exxon defies low oil price with refining strength
NEW YORK (AP) — ExxonMobil Corp.'s refining and chemical operations rescued the company's third quarter results amid falling global oil prices and lower oil and gas production.
Exxon, the biggest U.S. oil company, posted a surprise increase in profit thanks to a 38 percent increase in profit from turning oil and gas into fuels and chemicals.
The company said Friday it earned $8.07 billion on revenue of $107.49 billion in the third quarter. Last year during the same period, Exxon earned $7.87 billion on revenue of $112.37 billion.
On a per share basis, the company earned $1.89, up from $1.79 last year and far above the $1.71 per share analysts polled by FactSet had predicted on average.
Exxon's oil and gas production fell 4.7 percent compared with the same period a year ago, driven mostly by lower natural gas production and the expiration earlier this year of Exxon's rights to production at a field in Abu Dhabi.
Exxon's output has been slipping for years. Its production of the equivalent of 3.83 million barrels of oil per day in the quarter was the company's lowest since the third quarter of 2009.
Lower oil and gas prices cost Exxon $670 million in the quarter as global oil prices fell 18 percent between the beginning of July and the end of September. Oil continued to fall in October and is sure weigh on the company's fourth quarter production results.
But low oil and gas prices make for low raw material costs — and higher profit — for refining and chemical operations, which turn oil and gas into fuels and chemicals. Exxon's profit from these operations rose to $2.22 billion from $1.62 billion in the quarter.
Exxon shares were up $1 to $95.45 in trading before the market opened. Exxon shares are down 7 percent since the beginning of the year, compared with an 8 percent increase in the Standard & Poor's 500 index.
Jonathan Fahey can be reached at http://twitter.com/JonathanFahey .