Exxon Mobil Corp. beat analyst estimates as a jump in earnings from its chemicals segment cushioned the blow from tumbling prices for oil and natural gas.
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.
The quarterly profit was the lowest since March of 1999, before Exxon merged with Mobil Corp. Still, the per-share result was 15 cents above the 28-cent average of 19 analyst estimates tracked by Bloomberg.
The company was boosted by a 38% increase in its petrochemicals division, to $1.4 billion, as well as a 33% cut in capital expenditures as it pulled back on drilling and exploration amid weak commodity prices.
The world’s biggest non-state oil explorer joined energy giants BP, Statoil and Total this week in beating analyst expectations on the back of massive cost cuts and strong refining and chemical results even as oil profits vanished.
"The quarter showed the strength of Exxon’s diversification, a factor that would limit the company’s appeal to investors as oil prices recover," Molchanov said.
The chemicals division benefited from stronger margins and higher sales volumes, as the price of raw materials—oil and gas—plunged compared to last year’s first quarter. The downstream segment earned $906 million as global gasoline demand remained strong, according to the statement.
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.
