Exxon Slips as Production and Refining Margins Fall

[Stocks-to-Watch]

Exxon Mobil (XOM) shares fell 1.1% in early trading after the oil and gas giant posted slightly better than expected earnings, but saw oil production and refining margins fall.

Exxon posted $1.97 of earnings per share, a penny ahead of expectations. Exxon benefited from rising oil prices during the quarter; Nymex oil futures rose 25% in the quarter, and Brent crude rose 5%.

Overall oil-equivalent production fell 9% year over year, although “[e]xcluding the impacts of entitlement volumes, OPEC quota effects and divestments, production was down 4%.” The company’s natural gas production fell on weak demand and field decline in Europe, although production increased in the U.S.

The company’s downstream operations struggled, as earnings dropped by 725 million to 425 million. Margins — particularly in refining — deteriorated, reducing earnings year over year by $740 million.

Profits in its chemicals and engine lubricants divisions also fell, with chemical profits down 49%.

The company bought back $5 billion worth of its shares in the quarter, reducing its share count by a little over 1%.



Original Article Source by Barrons.com