Lower Production Cuts Exxon Profits
Lower production of oil and natural gas during the first quarter took its toll on ExxonMobil’s (NYSE:XOM) profitability, even though the impact was cushioned by higher global oil and gas prices.
Oil and natural gas production slumped more than 5 percent in the January-March period, primarily due to production losses overseas, though the company had warned in March that output would be down only 3 percent. Production averaged 4.55 million barrels of oil equivalent per day. The reduced production cost Exxon $850 million in profits, but the company added $980 million in profits due to the higher trend in global prices during the year.
Net earnings were down to $9.5 billion ($2 per share) compared to $10.65 billion ($2.14 per share) in the last year. The result was marginally off analysts’ estimates of $2.09 per share.
Profits were better in Exxon’s core refining and marketing operations, but the performance of the chemicals business was affected by weak margins and down time at plants due to maintenance shutdowns.