- The Washington Times - Saturday, January 31, 2009

HOUSTON | Exxon Mobil Corp. on Friday reported a profit of $45.2 billion for 2008, breaking its record for a U.S. company, even as its fourth-quarter earnings fell 33 percent from a year ago.

The previous record for annual profit was $40.6 billion, which the world’s largest publicly traded oil company set in 2007.

The extraordinary full-year profit wasn’t a surprise given crude’s triple-digit price for much of 2008, peaking near an unheard of $150 a barrel in July. Since then, however, prices have fallen roughly 70 percent amid a deepening global economic crisis.

In the fourth quarter, crude tumbled 60 percent, prompting spending and job cuts in an industry that was reporting robust, often record, profits as recently as last summer.

With piles of cash and diversified operations, the majors such as Exxon Mobil have fared better than many smaller oil and gas companies, but Friday’s results show no one is completely insulated from the ongoing malaise.

Irving, Texas-based Exxon said net income slid sharply to $7.8 billion, or $1.55 a share, in the October-to-December period. That compared with $11.7 billion, or $2.13 a share, in the same period a year ago, when Exxon set a U.S. record for quarterly profit. It has since topped that mark twice, first in last year’s second quarter and then with earnings of $14.83 billion in the third quarter.

Revenue in the most-recent quarter fell 27 percent to $84.7 billion.

Both the per-share and revenue results topped Wall Street forecasts. On average, analysts expected the company to earn $1.45 a share in the latest quarter on revenue of $69.1 billion, according to Thomson Reuters.

The nation’s second-largest oil company, Chevron Corp., reported profits of $4.9 billion for the fourth quarter, though revenues slid 26 percent with oil prices in sharp decline.

It earned $2.44 per share in the three months ended Dec. 31. Like Exxon, Chevron easily beat expectations of analysts, who were looking for profits of $1.81 per share.

The industry went into retrenchment toward the end of the year with demand falling.

As expected, Exxon Mobil’s bottom line took a beating from its exploration and production, or upstream, arm, where net income fell 31 percent to $5.6 billion. The culprit: lower crude prices, which the company said decreased earnings by $3.2 billion in the fourth quarter.

The company, which produces about 3 percent of the world’s oil, said overall output fell 3 percent in the most-recent period, a troubling trend in previous quarters. Exxon, which generates more than two-thirds of its earnings from oil and gas production, said production-sharing contracts and Organization of Petroleum Exporting Countries quotas contributed to its lower output.

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