Exxon Mobil Corp. (IW 500/1) beat analyst estimates as a jump in earnings from its chemicals segment cushioned a loss in upstream.
First-quarter net income fell to $1.81 billion, or 43 cents a share, from $4.94 billion, or $1.17, a year earlier, Exxon said in a statement on Friday. The per-share result was 15 cents above the 28-cent average estimate of 19 analysts in a Bloomberg survey.
Chemical earnings increased 38% to $1.4 billion on stronger margins and higher sales volumes, capturing increased specialty and commodity product demand along with significant cost benefits from both gas and liquids cracking advantages at integrated sites, the company said in the statement. The downstream segment earned $906 million as global gasoline demand remains relatively strong.
“The organization continues to respond effectively to challenging industry conditions, capturing enhancements to operational performance and creating margin uplift despite low prices,” Rex W. Tillerson, CEO said. “The scale and integrated nature of our cash flow provide competitive advantage and support consistent strategy execution.”
It was Exxon’s weakest quarterly profit in more than a decade amid tumbling energy prices that have already cost the world’s biggest non-state oil explorer its sterling credit rating.
The 2016 capital budget has been cut by about 33% from last year, a bigger decline than earlier estimated. Despite those measures, full-year profit is expected to dip below $10 billion in 2016 for the first time since the company’s historic acquisition of Mobil Corp. in 1999.
Brent crude, the benchmark for international oil sales, fell 36% to an average of $35.21 a barrel during the quarter from a year earlier, according to data compiled by Bloomberg. U.S. gas averaged $1.982 per million British thermal units, down 29% from the first quarter of 2015.
Despite the rout in crude markets, Exxon earlier this week raised its quarterly payout to stockholders by almost 3% to 75 cents a share. The pledge will cost the company $3.1 billion when the dividend is paid in June.