ExxonMobil, Chevron Earnings Miss Wall St Expectations
HOUSTON, July 27 (Reuters) - Exxon Mobil Corp and Chevron Corp, two of the world's largest oil producers, posted quarterly results far short of Wall Street's expectations on Friday.
The disappointing results come as much of the U.S. oil industry has been recovering from a three-year downturn in the energy sector, bolstered by higher production and crude prices.
Exxon shares were off 3.6 percent at $81.26 while Chevron's recovered from an early drop and were up 0.3 percent at $124.29 in mid-morning trading. Both stocks are components of the Dow Jones Industrial Average.
The results were particularly weak at Exxon, which has been trying to boost operations in a bid to revive a stock price trading at about the same level it was a decade ago.
Despite rising oil prices, Exxon's production dropped 7 percent and it spent heavily to upgrade several key refineries in France, Canada, Texas and Saudi Arabia.
The bigger hit to earnings came from the company's downstream unit, which refines crude oil into gasoline and other products. Its results fell 47 percent.
Exxon called the quarter a "challenging" one for its operations and "well below market expectations."
Neil Chapman, an Exxon executive and member of the company's management committee, said large refinery repairs are mostly behind the poor results.
"We are not happy" about the ongoing refinery maintenance, Chapman said on Friday's earnings call. He stressed there is "nothing systemic" about the repairs that would reveal weakness in the company’s refining division. The repairs cost more than $620 million in the second quarter.
"We are absolutely all over these reliability incidents," Chapman said.
Exxon earned 92 cents per share, while analysts expected earnings of $1.27 per share, according to Thomson Reuters I/B/E/S.
At Chevron, oil production rose 2 percent and profit spiked, but higher expenses surprised Wall Street.
Chevron earned $1.78 per share, while analysts expected $2.09 per share, according to Thomson Reuters I/B/E/S.
Royal Dutch Shell, a key rival, posted second quarter profit on Thursday far below forecasts due in part to weakness in its refining, trading and marketing division.
British oil major BP Plc is set to report quarterly results next week. BP on Thursday agreed to buy U.S. shale oil and gas assets from global miner BHP Billiton for $10.5 billion, expanding its footprint in onshore basins in its biggest deal in nearly 20 years.
(Reporting by Ernest Scheyder Editing by Nick Zieminski)
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