Exxon Earnings Hold Up Better With Higher Production

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Exxon Mobil Corp. (NYSE: XOM) reported estimated first-quarter 2015 results before markets opened Monday. The integrated oil and gas giant posted quarterly diluted earnings per share (EPS) of $1.17 on revenues of $67.62 billion. In the same period a year ago, the company reported EPS of $2.10 on revenues of $106.33 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.82 on revenues of $53.15 billion.

Profits in the first quarter fell 46%, from $9.1 billion in the year-ago quarter to $4.9 billion. In the upstream division, price realizations slashed earnings by $5.5 billion, while higher volumes and improved mix added $340 million, which Exxon said reflected growth from new developments. Other items, including favorable tax effects, increased earnings by $250 million.

In the downstream division profits totaled $1.7 billion, up $854 million year-over-year. Stronger margins boosted earnings by $1 billion, while higher volume and improved mix added $70 million. Higher maintenance costs and other items reduced profits by $260 million.

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Liquids production increased by 2.3% to 2.3 million barrels a day, an increase of 129,000 barrels a day. Natural gas production slipped by 188 million cubic feet per day year-over-year. Upstream operations posted a loss of $52 million, down from a profit of $1.3 billion in the same quarter a year ago.

Sales of refined petroleum products totaled 5.8 million barrels a day, essentially flat with the first quarter of 2014.

Chemical division profits were down $65 million to a total of $982 million.

Capital spending in the quarter totaled $7.7 billion, down 9% year-over-year.

During the first quarter of 2015, Exxon purchased 20 million shares of its common stock at a gross cost of $1.8 billion. Including dividends, the company distributed $3.9 billion to shareholders in the first quarter.

The company’s CEO said:

ExxonMobil’s balanced portfolio delivered solid financial results in the quarter. Regardless of current market conditions, we remain focused on business fundamentals and competitive advantages that create long-term shareholder value.

The company did not provide guidance in its press release, but analysts are expecting second quarter EPS of $0.82 on revenues of $55.03 billion, compared with EPS of $2.05 and revenues of $111.65 billion in the second quarter of 2014. Higher crude oil prices in the past six weeks or so could improve Exxon’s outlook for the current quarter, and we will be waiting to hear what the company has to say on its conference call later in the morning.

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Exxon’s shares traded up about 1.4% in Thursday’s premarket, at $89.12 in a 52-week range of $82.68 to $104.76. Thomson Reuters had a consensus analyst price target of $93.50 before this report.