Exxon Mobil profits slide amid low oil prices but beat expectations

Jessica Morris
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Exxon increased oil and gas production (Source: Getty)

The figures

Exxon Mobil posted profits of $4.24bn (£2.76bn) between July and September, down 47 per cent from $8.07bn a year earlier.

The oil major's revenue also fell 37 per cent to $63.75bn.

Refining, or downstream, profits nearly doubled to $2bn from a year earlier, while earnings at Exxon's upstream business, also known as exploration and production, crashed 79 per cent to $1.36bn.

Oil and gas production increased 2.3 per cent from a year earlier to 3.9m oil-equivalent barrels per day.

Why it's interesting

Exxon Mobil follows a host of other oil majors such as BP and Shell, which have revealed the full scale of the oil price rout this week.

Crude prices, the global benchmark, have fallen more than 50 per cent from last year's high of over $100 a barrel.

Read more: BP earnings fall but beat expectations

But the earnings have also shown how much Exxon's downstream business has helped shoulder the impact of this.

Downstream actually benefits from low oil prices because companies buy crude cheaply before turning it into products such as gasoline or diesel, essentially boosting their margins.

Low oil prices have also been a boon where M&A is concerned, because they make potential targets cheaper. Analysts have speculated Exxon could snap up one of several of the largest oil producers, including, controversially, BP.

What Exxon said

Chief executive Rex Tillerson said:

Quarterly results reflect the continued strength of our downstream and chemical businesses and underscore the benefits of our integrated business model.

In short

Low oil prices wrought havoc on Exxon's revenue and profit, but its upstream operations helped the company shoulder some of the impact of this.

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