ExxonMobil Profit Misses Street On Refining, Chemical Weakness



ExxonMobil Profit Misses Street On Refining, Chemical Weakness
ExxonMobil posted a lower-than-expected quarterly profit due to falling production and weakness in its chemical and refining operations.

Reuters

HOUSTON, Feb 2 (Reuters) - Exxon Mobil Corp, the world's largest publicly-traded oil producer, posted a lower-than-expected quarterly profit on Friday due to falling production and weakness in its chemical and refining operations, sending shares down 3.6 percent in morning trading.

Even though oil prices have jumped from last year's lows, helping Exxon's production operations, the company's refining and chemical arms struggled in the quarter, especially outside the United States.

Rival Chevron Corp also reported lower-than-expected earnings on Friday due to lower margins in its international refining arm, fueling concerns a weak spot could be emerging in the industry just as oil prices rise.

The rare earnings miss from Exxon came at the same time Royal Dutch Shell, the world's second-largest oil company, overtook Exxon's annual cash generation for the first time last year, producing about 6 percent more cash than Exxon's $33.2 billion in 2017.

Despite the trouble overseas, Exxon has been doubling down in its home territory. Irving, Texas-based Exxon said earlier this week it would triple its Permian shale production to about 600,000 barrels of oil equivalent per day by 2025, part of a plan to invest $50 billion in the United States thanks to tax reform signed by U.S. President Donald Trump.

"The impact of tax reform on our earnings reflects the magnitude of our historic investment in the U.S. and strengthens our commitment to further grow our business here," Chief Executive Darren Woods said in a statement.

Exxon posted fourth-quarter net income of $8.4 billion, or $1.97 per share, compared to $1.7 billion, or 41 cents per share, in the year-ago quarter.

The company saw a $5.9-billion non-cash benefit related to recent U.S. tax reform to revalue deferred taxes. Without the tax reform accounting changes, Exxon would have lost money in the United States.

Excluding that tax change and other one-time items, Exxon earned 88 cents per share. By that measure, analysts expected earnings of $1.04 per share, according to Thomson Reuters I/B/E/S.

Production fell 3 percent to 4 million barrels of oil equivalent per day, with the only output gains in the company's portfolio coming from the United States.

Throughput at the company's refineries - a measurement of how much volume they processed - fell 4 percent.

Exxon is slated to hold its annual investor day on March 7 in New York.

(Reporting by Ernest Scheyder; Editing by Nick Zieminski)



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