Exxon Mobil Earnings Cut In Half Amid Lower Crude Prices--2nd Update

By Chelsey Dulaney 

Exxon Mobil Corp., the biggest and richest U.S. oil company, reported a 52% drop in profit for its second quarter, as higher profit from its refining and chemical operations couldn't offset plunging earnings in its exploration and production business amid lower crude prices.

Shares of Exxon Mobil, down 16% over the past year, fell 1.8% to $81.50 in premarket trading.

Exxon's profit has been helped by its downstream and chemicals divisions, which are being boosted by low prices for oil and gas. In the first quarter, the segments reaped nearly as much profit as it made from pumping oil and gas--which traditionally generates the most profit.

In the latest quarter, refining and marketing earnings, or downstream, more than doubled to $1.51 billion from $711 million a year earlier. Exxon cited stronger margins for the increase.

Profit in the exploration and production business, or upstream, plunged 74% to $2.03 billion, as its U.S. upstream segment swung to a loss. Exxon's production improved 3.6% to 4 million oil-equivalent barrels per day.

The chemical segment earnings improved 48% to million to $1.25 billion as lower feedstock costs boosted margins.

In all, Exxon reported a profit of $4.19 billion, or $1 a share, down from $8.78 billion, or $2.05 a share, a year earlier. Revenue fell 33% to $74.11 billion.

Analysts polled by Thomson Reuters expected a per-share profit of $1.11 and revenue of $72.48 billion.

Capital spending fell to $8.26 billion from $9.8 billion a year earlier.

Exxon has moved to conserve cash in a sign that it doesn't expect a quick rebound in crude prices. The company has announced it would slash its capital spending by this year and reduce its stock buybacks in the near term.

Exxon also said it will again scale back its share buybacks during the current quarter to a level of $500 million. Exxon bought back $1 billion in shares in the second quarter, which was down from its previous level of about $3 billion in buybacks a quarter.

Stock repurchases are popular with investors because they shrink the number of shares available to the public and tend to make them more valuable.

Write to Chelsey Dulaney at [e-mail]

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