Exxon Mobil profit sinks on weakness in chemicals, refining - KFGO News

Friday, August 02, 2019 6:44 a.m. CDT

HOUSTON (Reuters) - Exxon Mobil Corp on Friday reported a 21% drop in quarterly profit, its third period in a row of weaker year-over-year results, as falling earnings in refining and chemicals offset improved oil production.Exxon’s weaker results mirrored those at rivals Royal Dutch Shell , Equinor and Total SA . Shell posted its smallest profit in 30 months on weaker margins in chemicals, a loss in refining and tumbling natural gas prices. Total also cited weaker natural gas and refining operations for earnings that fell 19% from a year ago, while Equinor’s profit fell 27% on weaker oil and gas prices.

The largest U.S. oil producer's net income fell to $3.13 billion, or 73 cents per share, in the second quarter, from $3.95 billion, or 92 cents per share, last year.

Analysts had expected Exxon to report earnings of 66 cents per share, according to data from Refinitiv. Analysts sharply lowered their expectations after the company disclosed weaker results last month, and had expected Exxon to earn 97 cents a share early in July.

"Pretty weak quarter from them once again," said Jennifer Rowland, analyst with Edward Jones. After capital spending and dividends, Exxon had a free cash flow shortfall of $2.7 billion, similar to last quarter, Rowland added.

A bright spot for Exxon was oil and gas production rising 7% to 3.9 million barrels per day.

Output in the top U.S. shale field, the Permian Basin, rose to 274,000 barrels of oil and gas per day, up 90% from a year ago.

Exxon has made "limited progress on asset sales," though, analysts at Tudor, Pickering, Holt & Co said in a note to clients.

The sales are needed to finance shareholder returns and major projects, but Exxon reported just $33 million in asset sales for the period, the lowest in at least 12 quarters. That follows proceeds from sales of $107 million in the first quarter.

Chief Executive Darren Woods this year set a target of raising $15 billion by trimming its portfolio through 2021, above the average $3.3 billion a year rate in recent years.

Exxon's chemicals business fell to a loss in the United States for the first time in at least three years.

Lower margins and downtime drove refining profits down 88 percent over last year.

Exxon boosted its estimated recoverable reserves in its offshore Guyana project to more than 6 billion barrels of oil equivalent, from 5.5 billion barrels.

Exxon shares rose 0.8% in early trading to $73.06.

(Reporting by Jennifer Hiller, Arathy S Nair in Bengaluru; Editing by Bernard Orr, Nick Zieminski and Bernadette Baum)

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https://kfgo.com/news/articles/2019/aug/02/exxon-mobil-profit-drops-on-weaker-gas-prices-higher-costs/924080/?refer-section=business

2019-08-02 13:40:34Z
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