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ExxonMobil profit up 17%

Latest update : 2008-05-01

ExxonMobil's first quarter profit rose 17 percent from a year ago to 10.89 billion dollars, though forecasts from Wall Street had anticipated much it to be higher.

ExxonMobil said Thursday its first-quarter profit rose 17 percent from a year ago to 10.89 billion dollars, but the earnings were below Wall Street forecasts.

The biggest US oil and gas company said gains from record-high crude prices were offset in part by weaker profit margins and higher operating costs.

The profit for the Texas-based firm amounted to 2.03 dollars per share, below the 2.13 dollars expected on Wall Street.

Revenues for the January-March period rose 34 percent from a year earlier to 116.9 billion dollars.

The quarterly earnings, a new record for the energy giant, followed a banner year for the company as crude oil prices soared on strong demand, particularly in China and India.

ExxonMobil posted a 2007 profit of 40.6 billion dollars, the largest US corporate annual profit in history.

Despite the strong profits, the company is being pressured on a number of fronts, analysts said. While company officials say the profits are in line with other industries, it is seen as gaining from troubles inflicted on consumers.

"The world's largest energy company may once again come under scrutiny by lawmakers for earning a record profit while US consumers face the burden of record-high oil prices," said Ryan McShane at Briefing.com.

"Meanwhile, Wall Street is not happy that Exxon's earnings fell short of expectations."

On Wednesday, a statement from the Rockefeller family that started the company that became ExxonMobil announced a shareholder drive to require an independent chairman of the energy giant's board of directors.

The Rockefellers are seeking support for a shareholder resolution to require an independent chairman so that the company founded by John D. Rockefeller "can better maximize long-term shareholder value in a rapidly changing energy environment," a statement by two family members said.

ExxonMobil chief executive Rex Tillerson also currently serves as the chairman of the company's board.

In the earnings statement, Tillerson said the rise in profit reflects the impact of a continuing share purchase program, and a mixed picture for oil and gas operations.

The company said it bought back about 110 million shares of its common stock in the latest quarter at a gross cost of about 9.5 billion dollars.

"Higher crude oil and natural gas realizations, driven by record worldwide crude oil prices, were partly offset by lower refining and chemical margins, lower production volumes and higher operating costs," he said.

Exxon, a component of the Dow Jones Industrial Average, said that profit from upstream activities, such as exploration and production, rose to a record 8.785 billion dollars in the latest quarter from 6.041 billion a year earlier.

By contrast, earnings from downstream activities such as refining and chemicals slid in the latest quarter to 1.17 billion dollars from 1.91 billion a year earlier.

Crude oil production fell 5.5 percent from a year ago, mainly due to the company's reduced activities in Venezuela, where the government of President Hugo Chavez nationalized oil fields in June 2007.

Shares in ExxonMobil were down 3.7 percent at 89.63 dollars in morning trading.
 

Date created : 2008-05-01

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