Exxon Mobil profit beats expectations on leaner costs

 
Jessica Morris
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ExxonMobile Posts Record Breaking Quarterly Profit
Exxon recently lost its prized triple-A credit rating (Source: Getty)

Exxon Mobil's profit plunged in the first quarter of this year, however cost cutting and asset sales helped it avoid an even messier set of results.

The world's largest listed energy company's net income fell 63 per cent to $1.8bn (£1.2bn) in the first three months of 2016, or 43 cents per share, compared with $4.9bn, or $1.17 per share, a year earlier.

But analysts who had pencilled in average earnings of 31 cents per share were left pleasantly surprised.

Read more: Profits collapse, but shares up as BP stays in the black

Exxon was helped by its capital budget which dropped 33 per cent during this period, as it guts the fat to survive one of the worst oil price downturns in recent history.

"The organisation continues to respond effectively to challenging industry conditions, capturing enhancements to operational performance and creating margin uplift despite low prices,” Rex W. Tillerson, chairman and chief executive, said.

It's a glimmer of good news for investors who've recently witnessed Exxon lose its prized triple-A credit rating for the first time in more than half a decade, and a historically small dividend rise.

Production rose two per cent to 4.3m barrels of oil equivalent per day, it said.

Read more: BP to kick off oil majors' worst reporting season yet

Profit at its oil and gas production plunged 74 per cent, while the company's refining unit endured a 45 per cent decline due to weaker margins. The latter is unusual for oil companies whose refining operations usually benefit from low prices.

This week French oil giant Total, London-listed BP and Norway's Statoil all reported better-than-expected first quarter results largely due to cost-cutting, with most of the gains coming from the firms' refining sectors.

Energy companies have suffered as oil prices fell around 60 per cent from more than $110 per barrel in the middle of 2014. This has inflated their debt burdens, while forcing the firms to cut costs, axe jobs and scale back exploration projects.

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