Mobil profit beats expectations on big cost cuts
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[April 29, 2016]
By Ernest Scheyder
HOUSTON (Reuters) - Exxon Mobil Corp, the
world's largest publicly traded oil producer, reported a
higher-than-expected first-quarter profit on Friday as it slashed costs
to offset plunging crude prices and weak refining margins.
The results reflect the new reality for an oil industry hammered by
a more than 60 percent drop in crude prices since 2014 that has
forced radical reductions in spending and personnel.
Exxon's capital budget during the first quarter dropped 33 percent
from a year earlier, reflecting a drive to survive a price downturn
that has already cost the company a perfect credit rating.
Exxon reported net income of $1.81 billion, or 43 cents per share,
down from $4.94 billion, or $1.17 per share, a year earlier.
Analysts on average expected earnings of 31 cents per share,
according to Thomson Reuters I/B/E/S.
Shares of Irving, Texas-based Exxon rose 0.6 percent to $88.60 in
Exxon Chief Executive Officer Rex Tillerson cited the company's
large size and cash flow for helping it weather the low prices.
"The organization continues to respond effectively to challenging
industry conditions," Tillerson said in a news release.
Production rose 2 percent to 4.3 million barrels of oil equivalent
Exxon's oil and gas production arm lost money in the United States
during the quarter. The company operates in North Dakota, Texas and
other parts of the country.
Internationally, profit at the oil and gas production arm fell 74
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The company's refining unit's profit fell 45 percent due to weak
margins, unusual as these operations tend to perform better during
periods of low oil and gas prices.
Exxon earlier this week had raised its dividend by 3 percent, one of
the smallest increases in years. Historically, increases have ranged
from 5 percent to 10 percent or more.
During the first quarter, Exxon spent more on its dividend than it
The dividend increase came the day after Standard and Poor's slashed
the company's sterling credit rating by one notch to "AA+," citing
concern about Exxon's quarterly payout to shareholders.
(Reporting by Ernest Scheyder; Editing by Lisa Von Ahn)
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