Exxon Profit Tumbles on Charge; Revenue Rises
January 31 2017 - 9:02AM
Dow Jones News
By Anne Steele
Exxon Mobil Corp. reported a 40% decline in profit in the final
quarter of the year as the oil and gas giant booked a hefty charge,
though revenue ticked up for the first time after nine straight
quarterly declines.
Still, the increase in revenue wasn't as big as Wall Street
expected, and shares inched 0.1% lower premarket to $84.75.
Chief Executive Darren Woods pointed to the prolonged downturn
in commodity prices as well as an impairment charge for the decline
in earnings. Mr. Woods took the helm this month from Rex Tillerson,
who was tapped by President Donald Trump to serve as U.S. Secretary
of State.
For the December period, Exxon, the largest U.S. oil company,
reported its profit fell to $1.68 billion, or 41 cents a share,
from $2.78 billion, or 67 cents a share, a year earlier. Analysts
polled by Thomson Reuters were looking for 70 cents a share.
The company said it completed an asset recoverability review
during the quarter and booked a U.S. upstream asset-impairment
charge of about $2 billion, mainly related to dry gas operations
with undeveloped acreage in the Rocky Mountains region of the U.S.
Excluding the impairment charge, earnings grew to $3.7 billion, due
to higher liquids realizations partly offset by weaker refining
margins.
Revenue edged 2% higher to $61.01 billion, the first increase in
many quarters but still below analysts' forecast for $62.28
billion.
The exploration and production, or upstream, business posted a
$642 million loss, including the $2 billion impairment. Excluding
the charge, earnings were $1.4 billion, up from $528 million in the
quarter the year before. In the U.S., the upstream division widened
its loss to $2.32 billion from $538 million a year earlier.
In the refining and marketing, or downstream, business -- which
had previously been a boon amid lower prices for oil and gas --
earnings were $1.2 billion, $110 million lower than in the
year-earlier period. Exxon blamed weaker refining and marketing
margins despite favorable volume and mix.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
January 31, 2017 08:47 ET (13:47 GMT)
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