Exxon revenue rises, 4Q profit beats expectations
Oil prices rose through most of 2018 but tumbled in the fourth quarter
DALLAS – Exxon Mobil increased revenue during a volatile fourth quarter for world oil markets, but profit fell 28 per cent from a year earlier, when Exxon booked a huge gain from lower corporate tax rates.
The profit topped Wall Street expectations, however, and capped Exxon’s most profitable year since 2014. The shares rose $1.22, or 1.7 per cent, to $74.50 in trading before Friday’s opening bell.
Chairman and CEO Darren Woods said the results during a tumultuous quarter showed that Exxon can generate cash under different kinds of market conditions.
Exxon reported earnings of $6 billion. Excluding the year-ago gain of $5.9 billion for lower U.S. income-tax rates, and big write-downs of assets, the company said profit would have risen 72 per cent from the fourth quarter of 2017.
Earnings per share were $1.41. The average estimate of five analysts surveyed by Zacks Investment Research was for $1.08 per share.
Oil prices rose through most of 2018 but tumbled in the fourth quarter on a combination of strong production in the U.S. and around the world, and concern that slowing global economic growth would derail demand for energy.
The roller-coaster ride for oil prices helps explain why Exxon’s revenue rose 8 per cent compared with late 2017—to $71.9 billion—but slipped nearly $5 billion from the third quarter. Revenue was well below the $74.18 billion average forecast of three analysts surveyed by Zacks.
Production inched higher by four-tenths of one per cent. Exxon produced slightly more oil but less natural gas than it did in late 2017.
Irving, Texas-based Exxon’s pace of spending on exploration slowed as oil prices tumbled. Capital spending in the fourth quarter was 13 per cent lower than a year earlier.
For all of 2018, Exxon Mobil Corp. earned $20.84 billion, slightly higher than the tax-cut-aided 2017 profit of $19.7 billion, and the oil giant’s best year since 2014, when it earned $32.5 billion. Oil prices began falling in the middle of 2014, pushing Exxon’s profit down over the next few years.
At Thursday’s market close, Exxon shares had increased 7.5 per cent since the beginning of the year, while the Standard & Poor’s 500 index had gained nearly 8 per cent. The stock has declined 16 per cent in the last 12 months.