Exxon's net income falls 23pc but beats forecasts
Published 02/02/2010 | 05:00
Exxon Mobil reported a fourth-quarter profit yesterday that topped Wall Street expectations as natural gas projects boosted results at the largest US oil company's exploration arm.
Still, Exxon's net income fell 23pc as weak demand for fuel in the global economic slowdown caused a loss in its refining business, while shares rose 3pc, outperforming a 2.2pc gain in the Chicago Board Options Exchange index of oil companies.
Oil and gas production increased nearly 2pc in the quarter to 4.18 million barrels of oil equivalent (BOE) per day -- better than some analysts had expected -- helped by production from Exxon's massive liquefied natural gas projects in Qatar. Exxon is also investing in natural gas closer to home. The company has said it planned to buy XTO Energy Inc for about $30bn (€21.5bn) in stock in a big bet on North America's fast-growing natural gas industry.
While the company declined to provide any details of the planned XTO acquisition on its earnings conference call, it did say the deal was still expected to close in the second quarter.
Underscoring Exxon's interest in developing fields with so-called unconventional gas trapped in substances like rock, the company said it had amassed 5.5 million unconventional gas acres worldwide and was accelerating development of the Marcellus Shale in the eastern United States with a joint-venture partner.
Exxon and other companies that process oil into gasoline, diesel and heating oil have seen refining margins crushed as crude prices climbed more than 30pc in a quarter where industrial demand was depressed by economic weakness.
Net income in the quarter was $6.05bn or $1.27 per share, compared with $7.82bn, or $1.54 per share in the same period a year earlier.
Wall Street analysts had expected a profit of $1.19 per share, according to Thomson Reuters.
Exxon's worldwide refining unit had a loss of $189m, compared with a year-ago profit of $2.41bn.
Exxon's chemical earnings were $716m, up sharply from $155m in the 2008 fourth quarter. The company's exploration arm earned $5.78bn, up from $5.63bn a year ago.
Exxon shares rose $1.85 to $66.28 in early afternoon trading on the New York Stock Exchange.